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MEXICO CITY (AP) — Stung by stubbornly high inflation, Mexico’s Central Bank announced Thursday that it had raised its prime interest rate by three-quarters of a point, to 7.75%.

Banco de Mexico said in the announcement that domestic inflation reached an annualized rate of 7.88% during the first half of June and that it does not expect to meet its interest rate target. inflation of 3% before the second half of 2024.

The bank said global inflation continues to rise and the rate hike may not be the last increase.

Moody’s Analytics Director Alfredo Coutiño said in a report that “Mexico’s policy rate will continue to tighten in an environment of growing risk of deteriorating expectations and continued market volatility.”

Mexico’s economy grew 1% in the first three months of the year, accelerating somewhat after registering a meager 0.2% growth in the previous quarter.

The Associated Press