(Bloomberg) -- A member of Mexico’s central bank board said there’s no room for further interest rate cuts, and the bank may eventually need to start withdrawing stimulus if inflation pressures remain elevated.Asked in an interview with Bloomberg News if she thought further monetary easing is off the table, Deputy central bank Governor Irene Espinosa said, “Yes, I think so, definitely in this context.” Swap rates rose after her comments.The bank’s five-member board last week voted unanimously to hold its key interest rate at a 5-year low of 4%, after inflation accelerated to more than double the 3% target. Espinosa said the end to rate cuts was “good news,” since it means the bank is expecting an economic recovery.Read More: Central Banks in Mexico, Chile, Peru in No Hurry to End Stimulus“We doubtless have to prepare ourselves for a global and local recovery process and that implies a change in the monetary policy vision,” she said.Economists surveyed by Citi expect Mexico to raise interest rates in February next year.Mexico’s two-year swap rate climbed to 5.3%, the highest since April 15, 2020, after Espinosa’s comments.‘Above Target’The bank has at times waited for the U.S. Federal Reserve to act before making major policy changes of its own. Espinosa said that this time it’s possible the board may need to increase rates ahead of its U.S. counterpart, which traders expect to begin to hike by the end of 2022.“Inflation in Mexico has been and is above target, and that puts us in a very different situation for the management of monetary policy from the U.S.,” she said.Traders are starting to price in faster inflation in the U.S., which affects the rest of the world, especially Mexico, Espinosa said.MEXICO REACT: No Talk About Hikes Despite High Inflation, RisksEspinosa spent nearly a decade as treasurer in the Finance Ministry before becoming the first female member of Banxico’s board in 2018. She previously worked at the Inter-American Development Bank in Washington.The bank has cut rates from 8.25% since mid-2019 in its deepest-ever easing cycle. It hasn’t yet reacted to the recent jump in inflation, arguing that much of the acceleration is likely to be temporary.Doubts remain over the solidity of Mexico‘s recovery, Espinosa said. “The growth we are seeing will be slow, long, and uncertain,” she said, arguing that internal demand needs support.That adds additional pressure to public finances, which Espinosa said “can be seen as somehow fragile“ as support for struggling state oil giant Petroleos Mexicanos weighs heavily on government coffers.“This support to Pemex isn’t necessarily resolving Pemex’s structural problems to allow it to be sustainable in the medium term,” Espinosa said. “We haven’t seen a new business plan that lets you see where these new sources of financing are coming from.”(Updates with markets in second, sixth paragraphs, comments on Pemex, public finances from 11th paragraph)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.