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© Reuters. FILE PHOTO: The logo of Mexico’s Central Bank (Banco de Mexico) is seen at its building in downtown Mexico City, Mexico August 9, 2022. REUTERS/Henry Romero

MEXICO CITY (Reuters) -The Bank of Mexico’s five-member governing board unanimously voted to hike the benchmark interest rate by 25 basis points to 11.25% on Thursday, moderating the pace of its tightening cycle and taking a more dovish tone on the future of rate moves.

Banxico, as the Mexican central bank is known, removed language in its post-meeting statement that appeared in prior statements explicitly mentioning the possibility of future upward adjustments to the key rate.

It instead said that for its upcoming May 18 decision, its “board will take into account the inflation outlook, considering the monetary policy stance already attained.”

With the latest increase, the 15th in a row and which was in line with market expectations, Banxico has raised its key interest rate by 725 basis points since its rate-hiking cycle started in June 2021 to combat inflation.

Banxico pointed out that “with this action, it slows the pace of interest rate increases and the monetary policy stance adjusts to the trajectory required for inflation to converge to its 3% target within the forecast horizon.”

Over the prior 10 straight meetings Banxico had increased the key rate by 50 basis points six times and 75 basis points four times. The last time it had hiked by 25 basis points was in November 2021.

“We anticipate Banxico is nearing the end of its policy tightening cycle absent a resurgence of inflationary pressures that may de-anchor inflation expectations. We project policy rate will peak 11.5% by mid-2023, and Banxico will begin a gradual policy easing in the later part of the year,” said Carlos Morales, sovereign director at Fitch Ratings.

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