The Bank of Mexico (Banxico) highlighted this Thursday that “the reduction in inflation has been significant”but considered it necessary to maintain “for a certain time” the interest rate at 11.25%, its highest level in history.
Everyone (in the Governing Board) stated that, despite the progress in disinflation, the outlook continues to involve challenges. In this regard, they agreed that the balance of risks regarding the expected trajectory of inflation in the forecast horizon remains biased upwards.“He stated in a report.
The members of the central bank highlighted that “general inflation maintains a downward trend.”
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The majority mentioned that general and core inflation continues to be expected to show a downward trajectory. He added that the Central Institute’s forecasts continue to anticipate that inflation will converge to the target (a rate of 3%) in the second quarter of 2025,” the report indicated.
The minutes correspond to the meeting of November 9, when the Governing Board kept the interest rate unchanged at 11.25% for the fifth consecutive time.
The document is published hours after it was announced that general inflation rose in the first half of November to 4.32%an increase above market expectations with which it broke 19 consecutive fortnights of decline.
But Banxico reduced its forecast for general inflation, now estimating that it will average 4.4% annually in the last quarter of 2023, from a previous projection of 4.7%.
While he maintained his expectation for the end of 2024, when inflation would average 3.4%.
The majority noted that temporary increases in general inflation are anticipated during November and December,” the Governing Board clarified.
On the other hand, The central bank highlighted that “economic activity showed greater dynamism than expected” in the third quarterwhen Mexico’s gross domestic product (GDP) grew 3.3% annually and 0.9% quarterly, according to the timely estimate of the National Institute of Statistics and Geography (Inegi).
Most noted that the pace of growth remains robust. “He pointed out that the economic expansion has been supported by the three sectors of activity,” he indicated.
The next monetary policy decision will be on December 14.
EFE International news agency based in Madrid and present in more than 110 countries.