Latest news with #BankofMexico
Reuters
5 days ago
- Business
- Reuters
Mexico inflation fall in early July reignites rate cut expectations
MEXICO CITY, July 24 (Reuters) - Mexico's headline inflation slowed in the first half of July, falling back within the central bank's target range and fueling expectations that the bank will continue to cut interest rates in Latin America's second-largest economy. Consumer prices rose 3.55% in the 12 months through mid-July, data from the national statistics agency showed on Thursday, slowing down from the 4.51% reported a month earlier. The figure also undershot the 3.64% expected by economists polled by Reuters. The slowdown in inflation "shows that the Bank of Mexico has room to keep cutting interest rates," President Claudia Sheinbaum said at her regular morning press conference. The Bank of Mexico, which targets an inflation rate of 3% plus or minus one percentage point, lowered its benchmark interest rate by 50 basis points in June - its third straight cut of that magnitude - bringing it to 8.5%, the lowest since August 2022. In the first half of July alone, Mexican consumer prices rose 0.15% compared to the prior two weeks, also below expectations of a 0.27% increase. Analysts at brokerage Monex said the data was a surprise as inflation in the first half of July reached its lowest level for this period in a decade, but emphasized challenges on core inflation. The closely watched core price index, which strips out some volatile food and energy prices, climbed 0.15% in early July, compared with 0.22% a month earlier. The 12-month core rate came in at 4.25%. "Given the stubbornness of core inflation, we expect Banxico to reduce the scale of its cuts: for the August 7 meeting, we estimate that it will cut the benchmark interest rate by 25 basis points to 7.75%," Monex analysts added.
Yahoo
6 days ago
- Business
- Yahoo
Mexico inflation falls within central bank's target range in early July
MEXICO CITY (Reuters) -Mexico's headline inflation slowed in the first half of July, falling back within the central bank's target range and fueling expectations that the bank should continue to bring down interest rates in Latin America's second-largest economy. Consumer prices rose 3.55% in the 12 months through mid-July, data from the national statistics agency showed on Thursday, slowing down from the 4.51% reported a month earlier. The figure also undershot the 3.64% expected by economists polled by Reuters. The Bank of Mexico, which targets an inflation rate of 3% plus or minus one percentage point, cut its benchmark interest rate by 50 basis points in June - its third straight cut of that magnitude - bringing it to 8.5%, the lowest since August 2022. In the first half of July alone, Mexican consumer prices rose 0.15% compared to the prior two weeks, also below expectations of a 0.27% increase. The closely watched core price index, which strips out some volatile food and energy prices, climbed 0.15% in early July, compared with 0.22% a month earlier. The 12-month core rate came in at 4.25%. Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
Mexico inflation falls within central bank's target range in early July
MEXICO CITY (Reuters) -Mexico's headline inflation slowed in the first half of July, falling back within the central bank's target range and fueling expectations that the bank should continue to bring down interest rates in Latin America's second-largest economy. Consumer prices rose 3.55% in the 12 months through mid-July, data from the national statistics agency showed on Thursday, slowing down from the 4.51% reported a month earlier. The figure also undershot the 3.64% expected by economists polled by Reuters. The Bank of Mexico, which targets an inflation rate of 3% plus or minus one percentage point, cut its benchmark interest rate by 50 basis points in June - its third straight cut of that magnitude - bringing it to 8.5%, the lowest since August 2022. In the first half of July alone, Mexican consumer prices rose 0.15% compared to the prior two weeks, also below expectations of a 0.27% increase. The closely watched core price index, which strips out some volatile food and energy prices, climbed 0.15% in early July, compared with 0.22% a month earlier. The 12-month core rate came in at 4.25%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
6 days ago
- Business
- Reuters
Mexico inflation falls within central bank's target range in early July
MEXICO CITY, July 24 (Reuters) - Mexico's headline inflation slowed in the first half of July, falling back within the central bank's target range and fueling expectations that the bank should continue to bring down interest rates in Latin America's second-largest economy. Consumer prices rose 3.55% in the 12 months through mid-July, data from the national statistics agency showed on Thursday, slowing down from the 4.51% reported a month earlier. The figure also undershot the 3.64% expected by economists polled by Reuters. The Bank of Mexico, which targets an inflation rate of 3% plus or minus one percentage point, cut its benchmark interest rate by 50 basis points in June - its third straight cut of that magnitude - bringing it to 8.5%, the lowest since August 2022. In the first half of July alone, Mexican consumer prices rose 0.15% compared to the prior two weeks, also below expectations of a 0.27% increase. The closely watched core price index, which strips out some volatile food and energy prices, climbed 0.15% in early July, compared with 0.22% a month earlier. The 12-month core rate came in at 4.25%.
Reuters
10-07-2025
- Business
- Reuters
Mexico central bank board signals smaller rate cuts amid sticky inflation, weak economy
MEXICO CITY, July 10 (Reuters) - Most of the Bank of Mexico's governing board supports smaller cuts to the key interest rate, minutes from June's rate decision showed on Thursday, signaling a more cautious approach as Mexico grapples with stubborn inflation and sluggish growth. All four board members who backed June's 50-basis-point cut — the fourth in a row — signaled openness to a slower pace going forward. At least two said the June move should be the last of that size. Annual headline inflation accelerated in May beyond the central bank's target range of 3%, plus or minus one percentage point. While it eased in June to 4.32% after four months of increases, it remains above target. Crucially, the core inflation index, a key gauge that strips out volatile prices, accelerated to 4.24% – its highest level since April 2024. For the board's majority, "the central argument is that the weakness in the economy will create slack conditions that would allow inflation to converge toward the 3.0% target," analysts from Actinver said. One of those governors noted the bank's current monetary policy stance "is appropriate to address risks to inflation on both sides of the balance," adding that "going forward, a more gradual approach will be adopted during the rate-cutting cycle." Another suggested that "adjustments of lesser magnitude" could be considered given the inflation outlook. Banxico, as Mexico's central bank is known, has cut its benchmark interest rate by 325 basis points since early 2024 and by 200 points this year alone, as inflation has eased from its 2022 highs. Alberto Ramos, head of Latin America economic research at Goldman Sachs, said the balance of views on the board "remains dovish though more cautious," lowering the baseline for the board's next decision, in August, "to a cut of no more than 25 basis points." Deputy Governor Jonathan Heath, who cast the sole vote at the June meeting to hold the rate at its previous level of 8.50%, called for prudence while making his dissent argument. Heath said the expectation that inflation would naturally become low due to "greater slack conditions" is "unrealistic" because even though there is economic stagnation, current forecasts do not point to a deep enough recession that would sufficiently weaken aggregate demand. Analysts polled by the central bank in the second half of June forecast the Mexican economy growing just 0.2% this year. The central bank's latest forecast, in late May, estimated growth at 0.1% for 2025.
