By Anthony Harrup
MEXICO CITY – Mexico’s inflation eased in the first half of September, reaching its lowest level since February 2021.
The consumer price index rose 0.25% in the first two weeks of the month, and was up 4.44% from a year earlier, the National Statistics Institute said Friday. The 12-month inflation rate was 4.64% at the end of August.
Core CPI, which excludes volatile prices of agricultural products and energy, rose 0.27% in the first half of September, slowing the annual rate to 5.78% from 6.08% in August.
Inflation has been steadily easing since February of this year, but the Bank of Mexico has indicated that it isn’t ready to start cutting interest rates. The central bank left its overnight interest-rate target at 11.25% at its previous three meetings, saying it expects to keep the rate there for an extended period.
“We think that the big falls in inflation in Mexico are now behind us and the headline rate is likely to hover around its current level over the next 9-12 months,” Capital Economics’ deputy chief emerging markets economist Jason Tuvey said in a note.
The Bank of Mexico has a 3% inflation target.
A majority of banks polled this week by Citigroup unit Citibanamex expect the Bank of Mexico to begin lowering interest rates in early 2024.
Write to Anthony Harrup at [email protected]
Read the full article here
