Sina US Stock News reported on the 17th, Beijing time, that the Mexican government announced on Monday local time that starting in 2020, the average daily minimum wage will be raised by 20% to 123.22 pesos (about 6.5%) dollars. This increase is seven times the current rate of inflation in Mexico (2.85%).

This is also the second time that Mexican President Andres Manuel Lopez Obrador (Andres Manuel Lopez Obrador) has raised the minimum wage drastically since taking office. The last time the increase was 16%. However, experts say that such a drastic wage increase may challenge the central bank of Mexico's efforts to control core inflation and break the central bank's trend of cutting interest rates. Since the end of last year, the Bank of Mexico has lowered the benchmark interest rate from 8.25% to 7.50%. Currently, the market generally expects the bank to cut interest rates by a further 25 basis points to 7.25% at this Thursday's meeting.

Experts also said that a drastic increase in the minimum wage will put pressure on wages in the formal economy. This situation is called the “lighthouse effect”. It is difficult to calculate, but it is usually pushedQualcommbloating.