Make Kitco Your Homepage

Mexico inflation continues slowdown in early September

Kitco News

Sept 22 (Reuters) - Mexico's headline inflation eased in the first half of September, official data showed on Friday, slightly below market expectations and fueling expectations that the central bank will hold the key interest rate at its record high level.

Headline inflation in Latin America's second-largest economy hit 4.44% in the 12 months through early September, down from 4.64% at the end of August, data from statistics agency INEGI showed. (MXCPHI=ECI)

The latest number, below the median forecast of 13 analysts polled by Reuters but still above the central bank's target, is likely to reinforce bets the Bank of Mexico will hold its key lending rate steady at an all-time high of 11.25% for longer.

The Bank of Mexico opted last month to hold its benchmark interest rate at that level for the third consecutive time, warning it would be necessary to maintain it for an "extended" period to meet its inflation target of 3%, plus or minus one percentage point.

The bank began its rate-hiking cycle in mid-2021, raising the key rate by a total of 725 basis points by May, when it paused the cycle.

Mexico's closely watched core price index, which strips out some volatile food and energy prices, reached 5.78% in the year through the first half of September, INEGI said, slightly above the 5.76% expected by economists.

In the half-month period, the agency added, headline prices climbed 0.25% while the core index was up 0.27%.

Reporting by Peter Frontini; Writing by Natalia Siniawski; Editing by Brendan O'Boyle

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.