Mexico Unexpectedly Lifts Rates for 9th Time in 2004 (Update2)

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Dec. 10 (Bloomberg) -- Mexico's central bank unexpectedly raised interest rates for a ninth time this year in a bid to fight inflation that accelerated in November to its fastest pace in almost three years.

``Month after month inflation has been worse than expected,'' said Hugo Penteado, Latin America economist for ABN Amro Asset Management in Sao Paulo and one of the five analysts among 18 surveyed by Bloomberg who predicted a rate increase. ``This was the last meeting of the year and they had no reason to wait to take action.''

Mexican consumer prices jumped 0.85 percent in November from the previous month, pushing up the annual rate to 5.43 percent, above the bank's 3 percent target. Electricity, tomatoes and liquefied gas led the November rise. Monthly inflation has increased in five of the past six months.

Banco de Mexico increased the amount commercial banks must borrow overnight at higher rates to 69 million pesos ($6.1 million) daily from 63 million pesos. Mexican authorities adjust interest rates by reducing or increasing the amount it lends at a rate that is double the going market rate.

Bloomberg