MEXICO CITY—The Bank of Mexico raised interest rates Thursday, noting market concerns over the next government’s economic policies that have contributed to a weakening of the peso and caused local debt yields to rise.

By majority vote, the central bank raised the overnight interest-rate target by a quarter of a percentage point to 8.0%, its first move since June. One member voted for a half-point increase to 8.25%. The bank said further rate increases are possible if needed to bring inflation back toward its 3% target.

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