MEXICO’S central bank said yesterday it had left its benchmark interest rate unchanged at a record high of 11.25% for a fourth consecutive time after inflation slowed again.

At the same time, the Bank of Mexico cautioned that consumer price pressures were taking longer than expected to ease and their future path was uncertain.

Inflation had continued decreasing, reaching 4.44% in the first half of September, the central bank said.

That is far below two-decade highs above 8% seen last year.

The outlook for inflation, however, is “complicated and uncertain,” a statement said.

The central bank now expects inflation to fall to near the official 3.0% target in the second quarter of 2025, later than previously forecast.

That appeared to open the possibility of further interest rate increase, said Gabriela Siller, head of economic analysis for the financial group Banco BASE.

“Seeing the new inflation forecasts from the Bank of Mexico, it would not be strange if they went back to raising the interest rate again before the end of the year,” she wrote on social media platform X.

In May, the central bank paused after 15 consecutive interest rate increases aimed at taming inflation blamed on pandemic-induced supply shocks and the war in Ukraine.

The governing board “considers that it will be necessary to maintain the reference rate at its current level for an extended period,” the statement said. – AFP, September 29, 2023.