UPDATE 2-Mexico inflation touches new record low in early July

July 23, 2015

7/23/15 Reuters

Data from INEGI

Data from INEGI

Mexico’s annual inflation rate cooled in early July to a record low, official data showed on Thursday, giving policymakers room to hold interest rates low until an expected increase in U.S. borrowing costs.

The national statistics institute said inflation in the 12 months through mid-July eased to 2.76 percent from 2.87 percent in June. A poll of analysts by Reuters had forecast the rate would be unchanged.

Most of Mexico’s central bankers think inflation will remain below their 3 percent target for the rest of the year because of the sluggish economy.

Despite tame inflation and weak growth, Mexico is seen raising interest rates when U.S. borrowing costs move higher.

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Bank of Mexico Held Interest Rates Steady Ahead of Budget Cuts

February 12, 2015

02/12/05 Wall Street Journal

banco de mexicoThe Bank of Mexico’s five board members voted unanimously last month to keep interest rates unchanged, a day before the government unveiled a series of budget cuts to address the drop in oil prices and expectations of more difficult financing conditions ahead.

The central bank, led by Agustin Carstens, left the overnight lending rate target at 3% for a fifth consecutive meeting Jan. 29.

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Surprise Drop in Mexican Prices Sends Inflation Rate Tumbling

January 22, 2015

1/22/15 Bloomberg 

5504964078_df874cacb5_zMexican consumer prices unexpectedly fell in the first half of January, pushing the annual inflation rate to the lowest in almost four years. Prices dropped 0.19 percent, the national statistics institute said on its website, compared with analyst forecasts that ranged from an increase of 0.09 percent to 0.49 percent. The annual inflation rate tumbled to 3.08 percent from 3.97 percent in the second half of December. Banco de Mexicotargets inflation of 3 percent, plus or minus one percentage point. Central bank Governor Agustin Carstens this month forecast inflation will be near 3 percent by the middle of the year, aided by the end of connection fees for long distance telephone calls, smaller gasoline price increases and an economy growing below potential. The peso strengthened 0.3 percent to 14.7128 per U.S. dollar at 8:07 a.m. in Mexico City.

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Carstens Sees Slower Mexico Inflation as Gasoline Gains Ease

October 1, 2014

09/30/14 Bloomberg

finance-market_dataMexico’s central bank has done a “good job” in helping guide the economy and the inflation rate will probably near its 3 percent target toward the middle of next year, Governor Agustin Carstens said. A change in the way gasoline prices are fixed will help curb the rise in broader consumer costs, Carstens said in an interview with El Financiero-Bloomberg TV, according to a transcript. Favorable comparisons with inflation this year, when the nation implemented a tax increase, will also help lower the annual rate starting in January, he said. Stable inflation expectations have allowed policy makers to lower interest rates to boost the economy in the absence of pressures on core inflation, which excludes farm and energy costs, Carstens said. Policy makers cut borrowing costs 1.5 percentage points in a 15-month period to 3 percent, the lowest in Latin America, to revive an economy that struggled to bounce back from its weakest expansion since 2009.

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Mexico Inflation Above Target as Increases Exceed Forecasts

September 25, 2014

09/24/14 Bloomberg

Mexican pesoMexican consumer prices rose more than expected in the first half of September, keeping the annual inflation rate above the upper limit of the central bank’s target range. Prices increased 0.32 percent from two weeks earlier, the national statistics institute said on its website today, compared with the 0.25 percent median forecast of 24 economists surveyed by Bloomberg. The annual inflation rate was 4.21 percent, above the 2 percent to 4 percent target range.

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Mexico Prices Advance More Than Forecast as Target Exceeded

August 22, 2014

08/22/14 Bloomberg

piggy bank with coinsMexican consumer prices rose more than analysts expected in the first half of August, keeping the annual inflation rate above the upper limit of the central bank’s target range.

Prices increased 0.19 percent in the two weeks, the national statistics institute said on its website today, compared with the 0.16 percent median forecast of 20 economists surveyed by Bloomberg. While the annual inflation rate fell to 4.07 percent, it remains above the 2 percent to 4 percent target range.

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Mexico annual inflation ticks up in June

July 9, 2014

07/09/14 Reuters

financeMexico’s annual inflation rate ticked up in June but remained below the central bank’s ceiling, boosting bets that policymakers will leave rates at an all-time low to support tepid growth in Latin America’s No. 2 economy.

Inflation in the 12 months through June was 3.75 percent, the national statistics institute said on Wednesday, below expectations of 3.78 percent in a Reuters poll and above the 3.51 percent annual rate registered in May.

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