AFP: Mexico’s central bank yesterday left its benchmark interest rate unchanged at a record high of 11.25 percent for a third consecutive time after inflation showed another decline.The Bank of Mexico’s governing board considered that “the disinflationary process is underway given that diverse pressures have eased” in Latin America’s second-largest economy, a statement said.
Mexico’s annual inflation rate eased to around 4.8 percent in July, far below two-decade highs above eight percent seen last year.In May, the central bank paused after 15 consecutive interest rate increases aimed at cooling inflation blamed on pandemic-induced supply shocks and the war in Ukraine.
The central bank expects inflation to approach the official 3.0 percent target by the fourth quarter of 2024, although it cautioned that the outlook was “complicated and uncertain,” with risks to the upside.
The governing board “considers that it will be necessary to maintain the reference rate at its current level for an extended period,” the statement said.
Analysts said that it was too soon to expect a loosening of monetary policy. “Concerns about the persistence of price pressures mean that interest rate cuts are unlikely until the turn of the year,” the British consultancy firm Capital Economics said in a note to clients.
Nayeemul Islam khan
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