Mexico City. Although the majority of the governing board of the Bank of Mexico (BdeM) warns that service inflation continues to exhibit persistence, the reference rate will continue to have additional adjustments, reveal the minutes of the central bank, corresponding to the monetary policy decision on September 26, 2024, where the rate was cut from 10.75 to 10.50 percent.
In a decision that was not unanimous, the BdeM minutes confirmed the divergence regarding monetary policy. However, all board members believed that service inflation continues to exhibit persistence.
Although the inflation outlook in Mexico has been improving, the increase in consumer prices still faces challenges. However, going forward, it is expected that the inflationary environment will allow additional adjustments to the reference rate.
Thus, it is expected, according to the minutes, that interest rate cuts will continue by at least 0.50 percentage points before the end of 2024. Where the first 0.25 percentage points could be cut on November 14.
Most mentioned that forecasts for headline and core inflation were adjusted slightly downward for some quarters in the near term. The majority believed that general inflation is expected to resume its downward trend and that core inflation will continue on its downward path, as happened in the September data, where the first was 4.58 percent and the second was 3.91 percent. annual. This information was announced this Wednesday by Inegi.
The majority considered that the balance of risks regarding the expected trajectory of inflation in the forecast horizon remains biased upwards.
The board will take into account the prospect that global shocks will continue to fade and the effects of weak economic activity. The central bank reaffirms its commitment to its priority mandate and the need to persevere in its efforts to consolidate an environment of low and stable inflation.
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#Inflationary #risks #continue #decline #rates #continue #BdeM
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