Mexico's interest rate hike needed to stabilize economy: experts

An increase of interest rates by Mexico's central bank Thursday following the much anticipated interest rate hike by U.S. Federal Reserve will help the country stabilize the Mexican economy and avoid a continued slide of the peso, experts said.

The Bank of Mexico's move "was to reduce the rate differences with the U.S., which could have led to capital flight and more volatility on the Mexican financial market," Gabriela Siller, director of economic analysis at Banco BASE, a Spanish savings bank, told Xinhua.

Rafael Nava, president for Latin America at the Mexican Business Council for Foreign Trade, Investment and Technology (COMCE), said the rise of 25 basic points to 3.25 percent by Mexico was a "proof of trust" to the United States.

"We are certain Mexico will benefit from it as 80 percent of our exports are linked to the American economy," Nava said.

Due to the country's low growth and inflation, the Bank of Mexico had maintained a 3 percent interest rate from June 2014.

Fed announced early this week raising the benchmark interest rate by 25 basis points, the first rate hike since 2006, marking the end of an era of extraordinary easing monetary policies.

However, many analysts insisted that volatility could rise in financial markets after the U.S. central bank's first rate hike in nearly a decade. Endi