Mexico City, Mar 25 (IANS): The Central Bank of Mexico (Banxico) has raised the key interest rate for the seventh consecutive time as it also raised its inflation forecast for the year due to pressures from the Covid-19 pandemic and geopolitical conflict.

In a statement on Thursday, Banxico said its Board of Governors unanimously decided to raise the overnight interbank interest rate (the interest rate banks use to borrow from and lend to each other) by 50 basis points to 6.5 per cent as of Friday, reports Xinhua news agency.

"Global inflation continued to rise, driven by bottlenecks, and high food and energy prices," the bank said.

"Adding to the shocks from the pandemic are pressures stemming from the geopolitical conflict."

Banxico raised its inflation forecast for the end of 2022 to 5.5 per cent from the 4 pe rcent projected in February, while increasing it slightly for 2023 from 3.1 per cent to 3.2 per cent.

The central bank began the current cycle of rate hikes in June 2021, amid rising inflation.