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members the Banxico Council Analyze the way forwardbecause the dissipation of inflation in Mexico allows them to consider the end of the record rates adjustment cycle.
The Bank of Mexico slowed the rate of increase Interest rates last month as inflation slowed, however Minutes of your meeting From March which was published on Thursday 13th April It turns out that monetary easing may not be forthcoming.
members of the central bank They voted unanimously to raise interest rates By a quarter of a percentage point at the last meeting, he raised The reference rate is at 11.25 percent.
In their statement after the decision, the policymakers, led by Governor Victoria Rodriguez-Sega, said the board would “closely monitor inflationary pressures” and other factors that caused the rate to rise to its highest level since the bank adopted inflation targeting in 2008.
What does Banxico think about Mexico’s interest rate and inflation?
At least one member del Banxico expects the bank’s target level to be 3 percent, plus or minus one percentage point, It will be difficult to access Unless monetary policy remains restrictive.
The forward-looking guidance “suggested in this policy statement is only limited to the following decision and ignores the announcement that we expect the monetary policy stance to remain constrained for two years to achieve convergence with the stated target of 3 percent,” Erin Espinosa said.
Another member pointed this out slowing rate of increase in interest rates In the latter decision was justifiedalthough core inflation has shown “greater stability” in part because the real interest rate, which adjusts the current rate for future inflation expectations, is “expected to rise”.
That member said The monetary policy of Banxico should be expected begin to show their effects “more clearly” In the second half of this year and around 2024, When it should fully achieve its goals, depending on the record.
The Board of Directors of the Bank of Mexico said so Will continue to look at inflation expectations In deciding whether to extend the drive for increases that saw interest rates rise by a record 725 basis points since June 2021. March’s decision to slow to a quarter-point increase followed a similar move. by the US Federal Reserve. Banxico often tries to maintain the spread to avoid capital outflows.
The Fed and Banquico are likely to extend the series of interest rate hikes Next month, despite slowing inflation in neighboring economies and the recent liquidity crisis that has rocked US banks and markets, fueling speculation that each is nearing the end of the tightening cycle.
How are the inflation rates in Mexico?
Inflation in Mexico slowed to 6.85 percent in March, from 7.62 percent in the previous month, as it continued to fall from its peak of 8.7 percent last year. The core reading, which excludes volatile items such as fuel, declined more slowly and remains of interest to policymakers. It fell to 8.09 percent last month from 8.29 percent in February, after recording its highest level in November at 8.51 percent.
economists They expect inflation to reach 5.26%. at the end of this year with a core expectation of 5.52 percent, according to Benxico’s latest monthly survey released last week.
