MEXICO’S central bank yesterday left its benchmark interest rate unchanged at a record high of 11.25% for a second straight month, following a further slowing of inflation.

The Bank of Mexico’s governing board considered that while inflation remains well above the official target, “the disinflationary process is underway” in Latin America’s second-largest economy, a statement said.

The board “considers that it will be necessary to maintain the reference rate at its current level for an extended period,” it said, reiterating a view given last month, when it had paused after 15 consecutive rate increases.

Mexico’s annual inflation rate eased to around 5.2% in the first fortnight of June, the central bank said, having reached two-decade highs above eight percent last year.

The central bank expects inflation to fall to near the official 3.0% target by the fourth quarter of next year, although it said that the outlook for consumer prices “is still very complex.” – AFP, June 23, 2023.