By Juan Montes

MEXICO CITY--The Bank of Mexico raised interest rates Thursday by a half-percentage point, in line with expectations, after Donald Trump's surprise win in the U.S. election sent the peso to fresh lows against the U.S. dollar last week.

The central bank raised the overnight interest rate target to 5.25% from 4.75%, a move intended to shore up the peso and contain inflation, but also one that could accentuate the country's current economic slowdown.

In its policy statement, the bank acknowledged the uncertainty over Mr. Trump's concrete policies are affecting local markets.

Mr. Trump's campaign pledges to renegotiate or withdraw from the North American Free Trade Agreement pose a heightened risk for Mexican assets as exports to the U.S. represent about a quarter of Mexico's annual economic output.

(END) Dow Jones Newswires

November 17, 2016 14:41 ET (19:41 GMT)

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