Mexico sets highest benchmark interest rate in nearly 8 years to curb inflation

Mexico's central bank Banxico on Thursday raised the benchmark interest rate to 6.25 percent, the highest since April 2009, to curb inflation.

Inflation began to rise in October to close 2016 at 3.36 percent, and rose to 4.72 percent in January.

The bank's governing board said the price of commodities in Mexico is being driven up by a recent increase in the gasoline price.

"We expect inflation this year to be temporarily affected...by the passing impact of the liberalization of the fuel price," the bank said.

The bank forecasted annual inflation in 2017 would go over the target rate of 3 percent by about one percentage point, then possibly dipped toward the year end to settle at close to 3 percent by 2018.

Banxico's benchmark interest rate has not exceeded 6 percent since April 2009, when it reached 6.75 percent. It closed 2016 at 5.75 percent. Endi