Mexico central bank holds interest rates steady

Mexico's central bank is keeping interest rates steady at 8.25 percent.

Banco de Mexico says it will fix rates to re-establish confidence in Mexican financial institutions and to reactivate restricted credit markets.

The interest rate has been set at 8.25 percent since August. Levels in June dropped to 7.75 percent, then rose again to 8 percent in July.

Slowed economic growth, rising material and food costs and the weakening Mexican peso drove annual inflation to 6.2 percent in the first two weeks of November. That is a seven-year high.

The peso was trading at 13.2 to the dollar Friday.

The bank says it expects inflation to rise in the fourth quarter, then drop to around 3 percent next year.

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