Mexico ups benchmark lending rate ¼-point to 7.25 percent

MEXICO CITY –  Mexico's central bank is raising its benchmark interest rate a quarter point to 7.25 percent to try to rein in inflation that continues to outpace targets.

The Bank of Mexico says in a statement that annual inflation was 6.63 percent in November.

It forecasts convergence with its 3 percent target to be slower than previously anticipated and says inflation could near that goal around late 2018.

Mexico's economy shrank 0.2 percent in the third quarter amid uncertainty over NAFTA renegotiation talks and natural disasters, including two damaging earthquakes.

The bank said Thursday that there has been some slowdown in manufacturing exports, indicators of private consumption have been less dynamic and investment has weakened.

It said the balance of risks to growth continue to trend downward, primarily due to NAFTA uncertainty.