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, may reduce its overnight target rate to 7.75 percent by March from 9 percent today, said Alonso Cervera, an economist with Credit Suisse First Boston in New York.
“There’s room for the central bank to cut,'’ Cervera said. “At the same time, I expect the central bank to stop at a rate that is still seen as restrictive.'’
More: quote.bloomberg.com
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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
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The yield on fixed-rate bonds may rise as much as 30 basis points, or 0.3 percentage point, as higher-than-expected consumer price increases drive down already ``tight'' valuations, Moreno said. The annual inflation rate may climb as high as 3.9 percent in January, more than the 3.5 percent expected by many fund managers, he said.
``There's a risk that inflation expectations rise
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The inflation number today is going to look pretty bad, said Raul Rodriguez, head of economic analysis at Mexico City- based
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The central bank said in its twice-monthly policy review it was keeping its money market "short" unchanged at 79 million pesos a day and made no change to the country's overnight lending rate, which stands at 9.00 percent.
The short regulates overnight lending levels and was the central bank's main monetary policy weapon before it recently began explicitly telling markets how much rates should move.
With inflation under
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``We still
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Government reports scheduled for release today will show Mexico's annual inflation rate dropped to a record low in September while Brazil's rate held near its lowest in 16 months, according to more than a dozen economists surveyed by Bloomberg.
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The Bank of Mexico said in a statement it will allow the overnight rate to decline to 9.25 percent from 9.50 percent following a reduction of 0.25 percentage point at its Aug. 26 meeting, which marked the first time ever the central bank set a rate for the market.
``The Mexican economy reduced its expansion rate during the first half of the year, showing lower
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Prices increased a slightly higher-than-expected 0.61 per cent in December but ended the year up at only 3.3 per cent - lower than at any time since the government began keeping records 36 years ago.
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