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Bank of Mexico says inflation should return to downward trend -El Financiero By Reuters

Bank of Mexico says inflation should return to downward trend -El Financiero

© Reuters. FILE PHOTO: A butcher sells meat at a market in Mexico City, Mexico, January 19, 2022. REUTERS/Edgard Garrido/File Photo

MEXICO CITY (Reuters) – Mexican headline inflation should stabilize and return to a downward trend, the governor of the Bank of Mexico, Victoria Rodriguez, said in an interview with El Financiero published on Monday.

In the interview, Rodriguez noted that higher prices for fruit and vegetables due to climate factors were temporarily pressuring inflation.

The Bank of Mexico’s five-member board unanimously held its benchmark interest rate at 11.25% for a seventh straight monetary policy meeting on Thursday, hinting that a rate cut was possible at upcoming meetings.

Banxico, as the bank is known, began a rate hiking cycle in June 2021 and has held the key rate at its current record-high since last March.

Annual headline inflation in Latin America’s second-largest economy ticked up at 4.88% in January, compared to 4.66% a month earlier and above Banxico’s target of 3% plus or minus one percentage point.

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