Banco de México raised its benchmark borrowing rate by 25 basis points to 7.25% following a recent increase in inflation, Reuters reported.
Inflation rose to an annual rate of 6.63% last month, close to a 16-year high reached in August.
The central bank's board said that the annual inflation rate could take longer to reach its 3% target, but the figure should be near 3% by the end of 2018.
The central bank said it was willing to take the necessary action again to curb inflation.
"Due to the intensification of the risks that could affect inflation, the board will be vigilant and, if necessary, will take the corresponding actions, as soon as it is required" to push inflation toward the target, the bank said in a statement, as quoted by Reuters.
The rate hike was decided during the bank's first monetary policy meeting under a new governor, Alejandro Díaz de León, who was named to the post in November.