The Bank of Mexico (Banxico) is outlining, for the fourth consecutive time, leaving its reference interest rate unchanged due to the rise in prices.
Annual inflation slowed in May, but remained above the central bank’s target range of 3% +/- one percentage point.
Analysts consulted by the Reuters agency estimate that inflation in the first half of June will be 5.84% compared to 5.99% that was registered in the second half of May.
Inflation would be picking up due to the increase in the price of food, such as tortillas and some services. As for core inflation, a rate of 4.42% is expected.
The governor of the central bank, Alejandro Díaz de León, said recently that the high levels of inflation will be transitory and that the year will close at 4.8% levels due to supply shocks as well as pressures on the prices of agricultural and livestock products. energetic.
Banxico has avoided moving the key rate in its last two monetary policy meetings, citing high levels of inflation.
Although an increase in the rate is not expected, there are voices that point out that Banxico should start an upward cycle soon, as countries such as Brazil, Turkey and Russia have done.
“I am one of those who think that the inflationary issue in Mexico is not transitory and that the Bank of Mexico should act. There are several factors: one is that several countries are already facing the shock of commodities on their inflation. Second, after a 6.1% inflation peak in April, the May figure was 5.89%, which indicates a slowdown in the rate of price growth. However, not core inflation, which grew from 4.3% in April to 4.37% in May ”, recently warned Jesús Garza, professor at the EGADE Business School of the Tecnológico de Monterrey.
On Thursday at 1:00 p.m. local time, Banxico will officially announce its monetary policy decision.
