UPDATE 2-Mexico inflation dealt another blow in September
Mexican inflation fell to a lowest recorded annual rate of 3.51 percent in September as the central bank exorcised the ghost of hyperinflation and looks set to keep cutting interest rates to spur growth.
Consumer prices rose 0.40 percent in September, below expectations. Closely watched core inflation, which strips out volatile food and energy prices, was 0.18 percent during September, the bank said on Friday.
“It’s a good number,” said John Welch, an economist at Lehman Brothers in New York. “They were able to bring inflation down very fast.”
A vigorous cycle of monetary policy tightening by Mexico’s central bank last year sent foreign investors flocking to buy long-term peso-denominated debt, something unimaginable for a country once crippled by triple digit price increases.
Now the bank can concentrate on cutting rates to give an energy boost to a stable but tepid economy weighed down by lackluster manufacturing hurting from a drop in U.S. demand.
Mexico’s government said on Friday gross fixed investment, a measure of spending on machinery, equipment and construction, rose 2.9 percent in July from the year-ago period, compared with a Reuters poll forecast of 5.3 percent.
PRUNING FOR GROWTH
The central bank began cutting interest rates on August 26 and has so far pushed down the country’s overnight lending rate 50 basis points to 9.25 percent. Most analysts expect it to carry on snipping.
“I think that the next couple of rate cuts are pretty much a slam dunk,” said Michael Gavin, chief Latin American economist at UBS.
“December may be interesting,” he added. “If inflation remains contained and the economy remains weak I think you’ll continue to see rate cuts in December and beyond.”
Source: today.reuters.com
UPDATE 2-Mexico central bank pushes interest rates lower
Mexico's central bank on Friday pushed interest rates 25 basis points lower for the second straight month to revive a tepid economy.
The bank said it would allow the overnight lending rate, which has held at around 9.50 percent for the last month, to fall a quarter of a percentage point. The move was widely expected as inflation has come under control in recent months.
After a long period of tightening monetary policy to bring inflation down, the central bank changed tack last month and began pushing rates lower to help the struggling economy.
"The
Mexico's Inflation Rate Fell to Record Low of 3.05% in October
Mexico's annual inflation rate fell to a record low in October, adding to speculation that the central bank will keep cutting the benchmark lending rate to bolster economic growth.
Inflation was 3.05 percent in the 12 months through October, down from 3.51 percent in September, the central bank said. That's the lowest annual inflation rate since the central bank began keeping records in 1969. Mexico's monthly inflation rate fell to 0.25 percent in October from 0.4 percent the previous month.
The central bank, taking advantage of the slowdown in inflation,
UPDATE 4-Mexico holds rates steady, sees inflation easing
Mexico's central bank on Friday said it expects inflation to drop inside its target range this year, but refused to ease monetary policy for now and insisted that interest rates should remain high.
The central bank board said after its twice-monthly policy meeting it was keeping its money market "short" steady at 79 million pesos a day. An increase in the short reduces overnight lending to banks and tends to push interest rates higher.
Although the bank said it sees inflation falling inside the target range of 2 percent to 4 percent this year, it
Mexico stocks rise as Bernanke mum on inflation
Mexican stocks gained 1.2 percent on Friday and the peso fell for a fourth straight day after a speech by U.S. Federal Reserve Chairman Ben Bernanke made no mention of inflation or monetary tightening pressures.
The benchmark IPC stock index < .MXX> closed up 243.49 points at 20,994.94, while the peso lost 0.47 percent to end at 10.9715 per dollar.
The stock market was down 0.25 percent on the week, but still up a robust 17.93 percent in the year-to-date.
More : today.reuters.com
UPDATE 1-Mexico 28-day T-bill yield edges down to 9.57 pct
Mexico's benchmark 28-day T-bill yield edged down 1 basis point to 9.57 percent on Tuesday but longer-term rates fell sharply as investors bet the central bank will wait until next month before easing monetary policy.
The yield on 91-day T-bills, or Cetes, fell 13 basis points to 9.56 percent and 175-day paper was down 11 basis points to 9.46 percent.
The majority of analysts polled by Reuters on Tuesday predicted the central bank will not relax monetary policy this week, despite recent weak economic growth data.
Mexico's finance ministry lowered its forecast for 2005
Mexico inflation at 0.67 pct in first half November
Mexican consumer prices rose 0.67 percent in the first half of November, the central bank said on Thursday, slightly above expectations but not high enough to stop it from loosening monetary policy on Friday.
A Reuters poll of analysts had a median forecast of 0.65 percent.
Closely watched core inflation, which strips out volatile food and energy prices, was 0.12 percent for the first half of the month, compared with expectations of 0.15 percent.
The central bank began easing rates on Aug. 26 to boost a sluggish economy weighed down by a limp manufacturing
UPDATE 1-Mexico's central bank holds monetary policy steady
Mexico's central bank held monetary policy steady on Friday, pausing in its current loosening cycle as expected, despite record low inflation and a weak economy.
The central bank said in its twice-monthly policy review it was keeping its money market "short" steady at 79 million pesos a day. The short is one of the Banco de Mexico's main monetary policy tools.
A decrease in the short increases overnight lending to banks and tends to push interest rates lower, which encourages borrowing to stimulate economic growth.
At its last policy review on Aug. 26, Mexico's central
UPDATE 4-Mexico pushes rates lower in historic move
Mexico's central bank pushed interest rates lower on Friday for the first time in over three years to give the soft economy a boost, now that inflation is under control.
It was the first time the bank has explicitly told markets where it wants interest rates to go, and analysts said it was a major step toward a U.S.-style reference rate system.
"Considering the balance of risks versus inflation, the central bank has decided to allow a relaxation of domestic monetary conditions of no more than 25 basis points," the central bank said in
Mexico's Inflation Rate Drops to Record Low in August (Update1)
Mexico's annual inflation rate fell to the lowest on record in August, adding to expectations that the central bank will cut the benchmark lending rate for a second straight month.
Inflation in the 12 months through August slowed to 3.95 percent, the lowest rate since the central bank began keeping records in 1969, from 4.47 percent in July. The monthly inflation rate dropped to 0.12 percent from 0.39 percent in July as the cost of cars and vegetables such as tomatoes and avocados fell.
``Inflation has been declining consistently and
UPDATE 1-Mexico 28-day T-bill yield falls to 7.92 pct
The yield on Mexico's benchmark 28-day Cetes, or T-bills, dropped six basis points to 7.92 percent on Tuesday as investors saw the central bank cutting interest rates further despite an uptick in inflation.
The rate on 90-day Cetes fell 12 basis points to 7.84 percent while the yield on six-month paper dropped 11 basis points to 7.77 percent.
An earlier Reuters survey of Cetes dealers had predicted the 28-day Cetes rate would fall eight basis points to 7.90 percent and that longer-term T-bill yields would also fall.
The yield on the 5-year peso-denominated bond
