When you talk about inflation, and money reaches less and less, surely you have heard things like the interest rates of Bank of Mexico (Banxico)like this Thursday that announced another hikeand if you think that does not affect you, in Unotv.com we tell you how.
This December 15, the Banxico board announced an increase of 50 basis points to its interbank interest ratearriving to another all-time high of 10.50%as part of the measures that central banks around the world have taken in the face of the constant increases in inflation that have occurred during the year.
What is inflation?
First, we must talk about inflation, since everything starts from there, which the Bank of Mexico defines as “phenomenon that is observed in the economy of a country and is related to the disorderly increase in prices of most of the goods and services that are traded in their markets, for a prolonged period of time..
Likewise, the institution states that this disorderly rise in prices affects, among other things, the income distributionsince prices, the reference for the allocation of money, are distorted, in addition to the fact that increases occur faster than before.
In addition, within this framework, it stands out that inflation occurs, either due to an increase in the demand for products and services, or due to the decrease in supply, as it happens in Europa with the grain market, after Ukraine could not export them, also highlighting that the rise in a service, such as transport, will in turn affect other products.
How does the rise in the reference rate affect me?
Like the other central banks around the world, by increasing its interest rates, Banxico seeks to reduce the movement of moneyin order to reduce that demand that increases prices, in a kind of slowdown of the economy.
Now, these reference rates are used by banks for operations in which money is lent to each other, so for you translates into an increase in the interest rate on your personal, mortgage or automobile credit, as well as on the credit card.
So now you will pay more for those debts that you did not settle when your card was cut off and your credit will be more expensive if it is not contracted at a fixed interest, to an extent that, as we said before, Seek people spend less moneyin order to reduce demand and lower prices organically.
While how much interest remains will depend on the financial institution with which you have your credit or card, which will determine it. What yes, Banxico is expected to stop raising interest rates in the first quarter of 2023with which the card will stop coming out so high.
So now you know why there are several account statements in which your credit card charges you higher interest rates, so we reiterate the recommendation of pay monthly the expenses you make Or, if you are going to buy something for months, find that this is for months without interest or, at most, with fixed interest.
The upside advantage
On the other hand, there is good news, since this increase in the reference rate also applies to investmentsso if you have money saved now they will see higher returns, especially government ones, like Cetes, so this would be a good time to start with the saving habit.