Banxico hikes key interest rate more than expected to defend peso

Mexico's central bank aggressively raised its key interest rate more than expected on Thursday in a bid to support the peso and calm concerns that currency weakness could inflame inflation.

The Banco de Mexico raised its key rate by half a percentage point to 4.25 percent, above the 25 basis point hike projected by the median of analysts surveyed by Reuters.

The peso reversed losses to gain more than 1.6 percent