Mexico City, Mexico — After touching its highest level in 16 years in August, inflation in September registered a fall, reason why the Bank of Mexico considered that “it would seem already to have reached its maximum”.
Most of the members of the Board of Governors of the Bank of Mexico (Banxico) considered that the general inflation would seem to have already reached its maximum in August, according to the minutes of its meeting of end of September.
The National Consumer Price Index (INPC) reached a level of 6.66 percent at an annual rate in August, the highest since May 2001, according to information from the National Institute of Statistics and Geography (INEGI).
Meanwhile, inflation in September was the lowest in three months, recording a level of 6.35 percent.
In its monetary policy document at the end of September, the Central Bank unanimously decided to maintain the target for the interest rate at a level of 7 percent.
In addition, he estimated that the earthquakes of 7 and 19 September will have a moderate and temporary effect on inflation and economic activity in the country.
In the minutes, the Board also points out that core inflation also declined. One member noted that, despite the above, elements of concern remain as the decline in inflation in the first half of September was less than anticipated.
“More than half of the INPC basket registers annualized monthly growth rates greater than 4 percent, and even assuming that there is no volatility in the currency market next year, core inflation at the close of 2018 is expected to be above 3 percent.”
However, another recalled that inflation continues to suffer from the effects of various shocks that have affected it, including accumulated depreciation of the exchange rate in recent years, increases in direct and indirect prices stemming from the considerable increases in prices of various as well as recent increases in the prices of some agricultural products.
In the meantime, the majority of the members of the Board agreed that given the current monetary policy stance, the balance of risks for inflation could have deteriorated compared to that reported in the previous communiqué.