Banxico, Mexico’s central bank, on Thursday raised the key interest rate for the 12th straight time, as risks of accelerating inflation persist in the short and medium term.

The bank’s Board of Governors agreed to increase the target for the overnight interbank interest rate by 75 basis points to 10 percent, effective Friday, according to a statement.

“While some (inflationary) shocks have shown signs of mitigation, the balance of risks that could impact inflation over the forecast horizon remains biased to the upside,” Banxico explained.

“With this action, the monetary policy stance is adjusted to the trajectory required for inflation to converge to its 3 percent target within the forecast horizon,” it said.

Banxico estimated that inflation will close at 8.3 percent in 2022, while at the end of 2023 it will be at 4.1 percent.

It added that it will assess the magnitude of upward adjustments to the benchmark rate according to prevailing circumstances at its upcoming meetings.

In June 2021, Banxico began a cycle of raising the key interest rate in view of price increases derived in part from the effects of the COVID-19 pandemic.

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