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☆ Mexico inflation still easing but rate cuts seen only next year
▼ + stars: | 2023-11-09 | by ( ) www.reuters.com time to read: +2 min

A man buys vegetables at a stall in an outdoor market in downtown of Ciudad Juarez, Mexico July 27, 2023. Consumer prices rose 0.38% in October, according to non-seasonally adjusted figures, mainly driven by core inflation including higher food, beverage and service costs. The annual headline inflation reading came in slightly below economist forecasts in a Reuters poll, which stood at 4.28%. The closely monitored core index, which strips out some volatile food and energy prices, rose 0.39% during the month, while annual core inflation came in at 5.5%, in line with market expectations. "This report strengthens our view that headline inflation will remain under control over the coming months," said Pantheon Macroeconomics chief Latin America economist Andres Abadia, but "admittedly services inflation is still a bit sticky.

Persons: Jose Luis Gonzalez, Jason Tuvey, Banxico, Andres Abadia, Gabriel Araujo, Steven Grattan, Mark Heinrich Our Organizations: REUTERS, Bank of, Capital, Sao Paulo, Thomson Locations: Ciudad Juarez, Mexico, Bank of Mexico, Banxico, America, Sao

☆ Mexico inflation continues slowdown in early September
▼ + stars: | 2023-09-22 | by ( ) www.reuters.com time to read: +2 min

A man sells corn grains at a public market in Ozumba de Alzate, State of Mexico, Mexico, May 24, 2022. 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. If not, we're talking about the Bank of Mexico standing on just one foot," the president told a press conference. It warned that it would be necessary to maintain it for an "extended" period to meet its inflation target of 3%, plus or minus one percentage point. Mexico's economy grew 0.2% in July from June and expanded 3.2% from the same month a year before, the national statistics agency said earlier on Friday.

Persons: Edgard Garrido, Andres Manuel Lopez Obrador, Banxico, Lopez Obrador, Peter Frontini, Raul Cortes Fernandez, Brendan O'Boyle, Natalia Siniawski, Alistair Bell Organizations: REUTERS, Reuters, Bank of, Thomson Locations: Ozumba de Alzate, State, Mexico, Bank of Mexico

☆ Mexico sees similar economic growth next year, more help for Pemex
▼ + stars: | 2023-09-09 | by ( Ana Isabel Martinez | ) www.reuters.com time to read: +3 min

A draft seen by Reuters had forecast 2024 economic growth at 2.4%, below the final published figure. The 2024 budget will now be debated by lawmakers in Congress, where the ruling coalition of President Andres Manuel Lopez Obrador commands majorities in both chambers. The key 2024 oil price is used to estimate a large amount of government revenue. State oil company Pemex's overall budget will be cut 36%, according to the draft budget from 2023 funding levels. The draft budget projects those costs will dip next year by about 4.75 billion pesos ($270 million), or down by 7.6% in inflation-adjusted terms.

Persons: Mexico's Finance Ministry Rogelio Ramirez de la, Raquel Cunha, Andres Manuel Lopez Obrador, Ana Isabel Martinez, Carolina Pulice, Sarah Morland, Stephen Eisenhammer, Chizu Nomiyama, Leslie Adler, William Mallard Organizations: Mexico's Finance Ministry, REUTERS, Reuters, DUC, Thomson Locations: Mexico City, Mexico, MEXICO, Brazil

☆ Exclusive: Mexico budget sees lower growth, slower inflation in 2024 -draft
▼ + stars: | 2023-09-08 | by ( Ana Isabel Martinez | ) www.reuters.com time to read: +1 min

MEXICO CITY, Sept 8 (Reuters) - Mexico's finance ministry expects economic growth to slow in 2024 to around 2.4% from some 3% this year, according to draft budget forecasts seen by Reuters on Friday. The ministry did not immediately respond to a request for comment about the forecasts, which were in a draft document and confirmed by a source familiar with the matter. The draft was not dated, but the source said the figures were up to date. The ministry is due to present the official 2024 budget to lawmakers in Congress later on Friday. According to the document, the government estimates that headline inflation will ease to 3.8% at the end of 2024 from 4.5% at the close of this year.

Persons: Ana Isabel Martinez, Stephen Eisenhammer Organizations: MEXICO CITY, Reuters, Bank of, Thomson Locations: MEXICO, Bank of Mexico, Mexico's

☆ Bank of Mexico again holds interest rate firm, even as region begins cuts
▼ + stars: | 2023-08-11 | by ( Brendan O'Boyle | ) www.reuters.com time to read: +2 min

The logo of Mexico's Central Bank (Banco de Mexico) is seen at its building in downtown Mexico City, Mexico February 28, 2019. The unanimous decision by the central bank's five-member board is the third consecutive rate hold since Banxico, as the Bank of Mexico is known, halted a two-year hiking cycle in May amid easing inflation. Rate cuts in Mexico are unlikely until late 2023, analysts say, even as central banks begin easing their monetary policy. Annual inflation in Mexico slowed for the sixth consecutive month in July, official data showed on Wednesday, landing at 4.79%, but still above the central bank's target. In recent weeks, central banks in Brazil, Chile, Costa Rica, and Uruguay have cut their interest rates after aggressive monetary tightening cycles.

Persons: Daniel Becerril, Banxico, Jason Tuvey, Brendan O'Boyle, Sarah Morland, Anthony Esposito, Richard Chang Organizations: Mexico's Central Bank, Banco, REUTERS, Bank of, Capital Economics, Thomson Locations: Banco de Mexico, Mexico City, Mexico, MEXICO, Bank of Mexico, Latin America, Brazil, Chile, Costa Rica, Uruguay

☆ Mexico's inflation eases to lowest in two years
▼ + stars: | 2023-07-24 | by ( ) www.reuters.com time to read: +1 min

July 24 (Reuters) - Mexico's headline inflation eased in the first half of July to its lowest level in more than two years, the national statistics agency said on Monday. In Latin America's second largest economy, 12-month headline inflation reached 4.79% in the first half of July, the lowest since March 2021, slowing further but still above the central bank's official target of 3%. INEGI data showed that annual core inflation, which strips out some volatile food and energy prices, slid to 6.76% in the first two weeks of July. Last month, Mexico's central bank board members made the unanimous decision to keep its benchmark interest rate at 11.25% for the second time, and said might need to maintain rates at current levels for an extended period to bring inflation down to target. Banxico first paused its rate hikes in May after a nearly two-year hiking cycle that began in June 2021.

Persons: Natalia Siniawski, Bernadette Baum Organizations: Reuters, Thomson

☆ Mexico headline inflation seen slowing in early July to 2021 levels: Reuters poll
▼ + stars: | 2023-07-21 | by ( ) www.reuters.com time to read: +1 min

The median forecast of 10 analysts see annual headline inflation (MXCPHI=ECI) at 4.77% in the first 15 days of the month, its lowest level since March 2021. Core inflation (MXCPIC=ECI), which strips out volatile food and energy products, is forecast to have slid to 6.73% year-on-year, marking the eleventh consecutive fortnight of slowdown. Both still remain well above the central bank's target of 3%, plus or minus 1 percentage point. Banxico first paused its rate hikes in May after a nearly two-year hiking cycle that began in June 2021. Mexico's statistics institute will release inflation data for the first half of July on Monday.

Persons: Noé Torres, Marguerita Choy Organizations: MEXICO CITY, Thomson Locations: MEXICO

☆ Analysis: Latin America, after record tightening, could lead way on rate cuts
▼ + stars: | 2023-06-26 | by ( Marion Giraldo | ) www.reuters.com time to read: +5 min

The small South American country of Uruguay has already cut rates, by 25 basis points in April. Chile's central bank kept its key interest rate on hold at 11.25% last week, but said if recent positive trends continue, it could begin cutting the rate in the short term. Forecasts are pointing to a rate cut next month, said Cesar Guzman, macroeconomic analyst at Santiago-based Grupo Securities. Even there, however, the central bank opted to hold rates steady in June as monthly inflation slowed for the first time in half a year. "Colombia and Mexico will be the last ones to cut rates, possibly in the fourth quarter."

Persons: Joan Domene, Reuters Graphics Goldman Sachs, Alberto Ramos, Cesar Guzman, Luiz Inacio Lula da Silva, Kimberley Sperrfechter, Andres Pardo, Marion Giraldo, Natalia Ramos, Fabian Cambero, Nelson Bocanegra, Anthony Esposito, Jonathan Oatis Organizations: MEXICO CITY, U.S . Federal Reserve, European Central Bank, Bank of England, America, Oxford, Reuters Graphics, Grupo Securities, Reuters, Capital Economics, XP Investments, Thomson Locations: MEXICO, Chile, Brazil, Mexico, American, Uruguay, Santiago, COLOMBIA, America, Argentina, Colombia, Bogota

☆ Bank of Mexico seen holding key rate at 11.25% for the second time
▼ + stars: | 2023-06-20 | by ( ) www.reuters.com time to read: +1 min

MEXICO CITY, June 20 (Reuters) - Mexico's central bank will likely keep its benchmark interest rate unchanged in its next monetary policy decision, a Reuters poll showed on Tuesday, amid a slowdown in inflation. The 20 analysts polled by Reuters see the Latin American country's central bank maintaining borrowing costs at the current rate of 11.25% for the second time in the announcement scheduled for Thursday. The Mexican central bank, known as Banxico, unanimously held its benchmark interest rate steady at 11.25% in its last meeting, breaking a nearly two-year rate-hike cycle during which it raised the rate by 725 basis points to combat rising consumer prices. According to another Reuters poll, Mexico's headline inflation could hit 5.30% in the first two weeks of June, reaching its lowest level in more than two years. Banxico will announce its next interest rate decision on Thursday at 1 p.m. local time (1900 GMT).

Persons: Banxico, Noe Torres, Gabriel Burin, Jonathan Oatis Organizations: MEXICO CITY, Reuters, Thomson Locations: MEXICO, Mexican, Buenos Aires

☆ Mexico's annual inflation hits lowest since August 2021, beating forecasts
▼ + stars: | 2023-06-08 | by ( ) www.reuters.com time to read: +2 min

MEXICO CITY, June 8 (Reuters) - Mexico's annual inflation rate slowed in May for a fourth consecutive month to 5.84%, data from statistics agency INEGI showed on Thursday, beating forecasts and continuing a downward trend spurred by a long cycle of rate hikes. Headline inflation came in below a forecast of 5.90% and is now at its lowest since August 2021. Jason Tuvey, Deputy Chief Emerging Markets Economist at Capital Economics said that inflation forecasts remained overly optimistic. Banxico does not expect inflation to reach its target rate of 3%, plus or minus a percentage point, until late 2024. Annual core inflation, considered a better gauge of price trends, was 7.39%, as forecast.

Persons: Jason Tuvey, Isabel Woodford, Jason Neely, Christina Fincher Organizations: MEXICO CITY, Capital Economics, Thomson Locations: MEXICO, Mexican

☆ Mexican peso to stay strong despite end of central bank tightening cycle, analysts say
▼ + stars: | 2023-05-19 | by ( Noe Torres | ) www.reuters.com time to read: +2 min

MEXICO CITY, May 19 (Reuters) - The Mexican peso could remain the top performer among major global currencies in the coming weeks, despite Mexico's central bank choosing to halt a nearly two-year rate-hike cycle, analysts said. The Mexican peso has gained nearly 10% so far this year, driven mainly by the dollar's decline and money entering the country since the central bank started hiking interest rates in June 2021. Reuters GraphicsIn the Chicago Mercantile Exchange, seen as a market bellwether, speculators on different types of assets have been increasingly betting that the Mexican currency will keep appreciating. These positions, anticipating further strengthening of the peso since mid-March, reached 70,007 contracts in favor of the currency last week, a level not seen since March 2020. Considering these factors, Mexican economists expect the peso to weaken to 19.13 by year-end, a survey by the central bank showed, while a poll of Citibanamex experts estimated the figure at 19.20.

☆ Bank of Mexico likely to consider holding key interest rate steady
▼ + stars: | 2023-04-26 | by ( ) www.reuters.com time to read: +2 min

MEXICO CITY, April 25 (Reuters) - The Bank of Mexico's governing board may consider keeping its benchmark interest rate steady at its next monetary policy meeting, in what would be its first rate hold after 15 straight hikes, Central Bank Governor Victoria Rodriguez said on Tuesday. Banxico, as the Mexican central bank is known, hiked its key lending rate by 25 basis points to 11.25% at its March 29 meeting, moderating the pace of a tightening cycle that began in mid-2021 and striking a more dovish tone. For nearly two years, the bank has boosted borrowing costs to slow the rise in consumer prices. Banxico would keep close watch on so-called core inflation, Rodriguez added. "At least for the next decisions, we will not yet discuss the possibility of a rate decrease.

☆ Rising consumer prices in Mexico eased to a 17-month low in March
▼ + stars: | 2023-04-05 | by ( ) www.reuters.com time to read: +2 min

February's inflation rate stood at 7.62%. Still, core inflation, which strips out volatile food and energy prices, slowed to 8.09% from 8.29% the previous month. Month-on-month, Mexico's headline consumer price index rose by 0.27% in March, just under the 0.31% forecast in a Reuters poll. The latest data came ahead of a virtual meeting Wednesday between Latin American leaders from Mexico, Chile, Argentina, Brazil and Colombia, to discuss measures aimed at combating rising prices in the region. Last week, Mexico's central bank hiked its key interest rate to 11.25%, but moderating the pace of its tightening cycle.

☆ Mexico inflation eases to 17-month low of 6.85% in March
▼ + stars: | 2023-04-05 | by ( ) www.reuters.com time to read: +2 min

April 5 (Reuters) - Mexico's annual inflation slowed in March by more than expected to 6.85%, the lowest rate in nearly 1-1/2 years, although core price pressures remained elevated, data from national statistics agency INEGI showed on Wednesday. The March reading was the lowest since October 2021, and came in below the consensus forecast of 6.90%, as determined by a Reuters poll. Still, a measure of core inflation, which strips out some volatile items, slowed less than anticipated to 8.09% from 8.29% the previous month. Month-on-month, Mexico's headline consumer price index rose by 0.27%, less than the 0.31% forecast in the Reuters poll. Banxico has raised rates by 725 basis points since its rate-hiking cycle started in June 2021 to combat inflation.

☆ Bank of Mexico hikes key interest rate to 11.25%, takes dovish tone on future moves
▼ + stars: | 2023-03-30 | by ( ) www.reuters.com time to read: +2 min

MEXICO CITY, March 30 (Reuters) - The Bank of Mexico's five-member governing board unanimously voted to hike the benchmark interest rate by 25 basis points to 11.25% on Thursday, moderating the pace of its tightening cycle and taking a more dovish tone on the future of rate moves. Banxico, as the Mexican central bank is known, removed language in its post-meeting statement that appeared in prior statements explicitly mentioning the possibility of future upward adjustments to the key rate. Over the prior 10 straight meetings Banxico had increased the key rate by 50 basis points six times and 75 basis points four times. The last time it had hiked by 25 basis points was in November 2021. We project policy rate will peak 11.5% by mid-2023, and Banxico will begin a gradual policy easing in the later part of the year," said Carlos Morales, sovereign director at Fitch Ratings.

☆ Bank of Mexico seen hiking key rate by 25 basis points on Thursday
▼ + stars: | 2023-03-27 | by ( Noe Torres | ) www.reuters.com time to read: +1 min

MEXICO CITY, March 27 (Reuters) - The Bank of Mexico is expected to moderate the pace of its monetary tightening, and hike the benchmark interest rate by 25 basis points on Thursday as inflation has shown signs of cooling, a Reuters poll showed on Monday. All 20 analysts surveyed said they expect Banxico, as the Mexican central bank is known, to increase the key rate to 11.25%, in what would be the 15th rate hike in a row. (MXCBIR=ECI)Banxico's five-member governing board unanimously voted to increase the key rate by 50 basis points to 11.00% in early February, beating market forecasts, citing a complex inflation scenario. At the time, Banxico suggested that while its rate hiking cycle was not over, future increases could be smaller. Banxico has raised its key interest rate by 700 basis points to 11.00% since its rate-hiking cycle started in June 2021 to combat inflation.

☆ Mexican central bank poised for lower rate hike
▼ + stars: | 2023-02-23 | by ( ) www.reuters.com time to read: +2 min

"And, thus, limiting the next decision by referring to a policy rate adjustment of lower magnitude implies a high and costly risk of correction if the assumptions do not materialize," she said. In the minutes, board members underscored their concern over core inflation, which strips out some volatile food and energy prices, even as headline inflation has eased. "Most members pointed out that core inflation, which reflects inflation's trend more accurately, still does not show a downward trend. All five board members expressed concern that core inflation was more persistent than expected. The latest inflation data, released on Thursday, showed a slight easing, with annual core inflation down to 8.38% in the first half of February from 8.46% in the second half of January.

Banxico, as the Mexican central bank is known, has raised its benchmark interest rate by 700 basis points since its rate-hiking cycle started in June 2021, as inflation surged far beyond its target of 3%, plus or minus 1 percentage point. Initially Heath, who is regarded as one board's most hawkish members, expected to vote for a 25 basis points hike at the last meeting, until incoming data painted a "less benign" picture for inflation. He added that new information could sway Banxico's board members one way or another before the March 30 meeting. "Frontloading" with a half percentage point hike sought to keep that jump in services inflation to a one-off situation, said Heath, noting he saw price pressures starting to transition to more local and domestic factors from the predominantly global factors seen in recent years. Reporting by Anthony Esposito and Noe Torres; Editing by David HolmesOur Standards: The Thomson Reuters Trust Principles.

☆ Mexico's Mejia says central bank should consider decoupling from U.S. Fed -report
▼ + stars: | 2023-01-26 | by ( ) www.reuters.com time to read: +1 min

MEXICO CITY, Jan 25 (Reuters) - Mexico's central bank should consider decoupling from the U.S. Federal Reserve's monetary policy, Deputy Governor Omar Mejia said in a Bloomberg Linea story published on Wednesday, calling for discussion of the issue at the bank's next policy meeting. We have the decision coming soon and these are elements we are going to have to incorporate," Mejia said after a meeting with local bank association ABM. Video accompanying the story quoted Mejia as saying the central bank, known as Banxico, will discuss decoupling from the U.S. monetary authority. Mexico's central bank is considering raising its benchmark interest rate at its next policy meeting, scheduled for Feb. 9, according to minutes from its December session. Banxico's current benchmark interest rate is at 10.50%.

Annual headline inflation in the first half of the month reached 7.94%, beating both the 7.77% recorded in the month of December and economists' forecasts of 7.86%, though still below the two-decade high of 8.70% registered in August and September. That means annual inflation remains far above the Bank of Mexico's target rate of 3%, plus or minus one percentage point. It is unlikely that the bank will make any cuts to the interest rate in the next six months, Bank of Mexico board member Jonathan Heath said in an interview last week. In the first half of January, according to statistics agency INEGI, consumer prices rose 0.46% compared to the previous two-week period, while the core index rose 0.44%, both also exceeding market estimates. Mexico's Latin American peer Brazil, where monetary tightening is on pause, also released mid-month inflation data on Tuesday, with prices slightly beating market forecasts.

☆ Banxico nominee Mejia pledges independence at congressional hearing
▼ + stars: | 2023-01-18 | by ( ) www.reuters.com time to read: +1 min

MEXICO CITY, Jan 17 (Reuters) - A nominee of the Mexican government to join the Bank of Mexico's governing board, Omar Mejia, backed the central bank's monetary tightening policies on Tuesday and promised transparency and independence if chosen for the role. "It is crucial to preserve (the bank's) autonomy and maintain a strict respect for it in order to guarantee the institution's credibility," Mejia told a congressional committee. Since then, the Banxico board has increased Mexico's benchmark interest rate by a total of 650 basis points. The lower house committee voted in favor of advancing Mejia's nomination, which must be approved by the full chamber and then the Senate before Mejia can join the Banxico board. Reporting by Brendan O'Boyle; Editing by Isabel WoodfordOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: Is the party over? Mexico's peso could lose solid gains in 2023
▼ + stars: | 2022-12-29 | by ( Noe Torres | ) www.reuters.com time to read: +2 min

MEXICO CITY, Dec 29 (Reuters) - Mexico's peso, which is ending 2022 with one of its strongest performances in a decade, could have its gains wiped out in 2023 after an expected end to the Bank of Mexico's rate hikes cycle and a possible recession in top trade partner the United States. "The carry trade, the phenomenon that has benefited (the peso) this year, will likely dissipate a bit," said CI Banco analyst James Salazar. The carry trade refers to a trading strategy of taking advantage of yield differences between Mexico and other economies. Traders at the Chicago Mercantile Exchange, considered a bellwether of market sentiment, have started to bet the peso will begin depreciating. Reporting by Noe Torres; Writing by Anthony Esposito; Editing by Josie KaoOur Standards: The Thomson Reuters Trust Principles.

MEXICO CITY, Dec 15 (Reuters) - The Bank of Mexico raised its key interest rate by an expected 50 basis points to a record 10.50% on Thursday, tempering its monetary tightening pace amid a slowdown in inflation while suggesting it could hike rates at least once more. The decision follows four consecutive 75-basis-point hikes and comes after the U.S. Federal Reserve increased its key interest rate by 50 basis points Wednesday after four consecutive hikes of its own of three-quarters of a percentage point. "The board considers it will still be necessary to raise the reference rate in its next monetary policy meeting," said Banxico, as the Mexican central bank is known. "Subsequently, it will assess if the reference rate needs to be further adjusted as well as the pace of adjustments based on the prevailing conditions," it added. Banxico reiterated that inflation is projected to converge to its 3% target in the third quarter of 2024.

☆ Bank of Mexico hiking cycle seen ending with key rate at 11% -Franklin Templeton
▼ + stars: | 2022-12-08 | by ( ) www.reuters.com time to read: 1 min

MEXICO CITY, Dec 8 (Reuters) - Mexico's central bank's monetary policy tightening cycle will likely end in the first half of 2023 with the benchmark interest rate at 11%, before policymakers start to gradually ease rates, a Franklin Templeton executive said on Thursday. Banxico, as the Mexican central bank is called, has increased the key rate by 600 basis points to 10.0% since the middle of 2021 to combat rising inflation. "We believe the terminal rate is going to be at 11% in the first half of 2023," Luis Gonzali, co-chief investment officer of Franklin Templeton's Mexico unit, said during an event with reporters, adding that Banxico will then start to lower rates. Reporting by Noe Torres; Writing by Valentine HilaireOur Standards: The Thomson Reuters Trust Principles.

MEXICO CITY, Dec 7 (Reuters) - Mexico's financial system has a resilient and solid position, the country's central bank said on Wednesday during the launch of its financial stability report, adding that certain vulnerabilities and risks seen during the pandemic have eased. Banxico, as Bank of Mexico is known, said "commercial banks have capital and liquidity levels well above regulatory minimums" in its biannual report. However, Banxico underscored that Mexico is facing a "more complex and uncertain environment" characterized by high inflation, deteriorating growth prospects, and tight global financial conditions. Banxico also warned of the possibility of a greater tightening of global financial conditions, lower-than-expected global economic growth, a further weakening of aggregate demand, and further downgrades to Mexico and state oil company Pemex's credit ratings as risks to financial stability. Reporting by Isabel Woodford and Anthony Esposito, Editing by Alistair BellOur Standards: The Thomson Reuters Trust Principles.

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