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 a good August number reinforces the market’s expectations that we’ll see another rate cut later this month,'’ said Rafael Camarena, an economist with Santander Central Hispano SA’s Mexican unit, the nation’s largest peso-denominated bond trader.
August marks the first time since December 2003 that inflation has been within the central bank’s target range of 2 percent to 4 percent.
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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,
Mexico's Central Bank Reduces Rates to Boost Economy (Update1)
Mexico's central bank reduced its benchmark lending rate for a second time in as many months to help jumpstart a slowing economy, taking advantage of slowing inflation.
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
Mexico Fixed-Rate Bond Yields to Rise on Inflation, Moreno Says
Mexico's fixed-rate peso bond yields may rise in 2006 as the inflation rate climbs from a record low, said Salvador Moreno, chief economist at ING Groep NV's Mexican unit.
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
Currency Strategists: BNP Says Mexico's Peso May Fall
The Mexican peso, up 4.5 percent versus the dollar this year, will drop in 2006 as the central bank cuts its benchmark interest rate amid slowing inflation, said Rafael de la Fuente, chief economist for Latin America at BNP Paribas SA.
The peso has dropped 1.4 percent since the central bank lowered its key rate by a greater-than-expected half a percentage point to 8.25 percent on Dec. 9, the fifth reduction since August. Mexico's currency may also decline on concern lower rates will reduce the yield advantage of domestic bonds.
``We still
Mexico Will Keep Lowering Interest Rates, Ortiz Says (Update2)
Mexico's central bank will keep cutting its benchmark lending rate because inflation is in line with year-end targets, bank Governor Guillermo Ortiz said.
``We've started an easing cycle, we're lowering interest rates,'' Ortiz, 57, said in testimony before the Senate today. ``We're unlinked to the monetary cycle in the U.S.''
Ortiz said the bank is more focused on core inflation -- which excludes volatile fresh food and energy prices -- than the overall inflation rate. His comments suggest the bank will cut interest rates twice more before year-end even if rising fuel
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, Brazil Inflation Slows, Paving Way for Rate Reductions
Slowing inflation in Mexico and Brazil, Latin America's two biggest economies, is paving the way for central bankers to cut interest rates and curb gains in their currencies, analysts such as UBS AG's Michael Gavin said.
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.
Declining inflation rates may prompt Mexico to reduce its benchmark lending rate for a third straight
UPDATE 1-Mexico central bank holds interest rates steady
Mexico's central bank held interest rates steady on Friday, although it is widely expected to push them lower again later this month to help a soft economy.
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
Mexico's Bolsa Rises to Record, Led by Walmex: Latin Stocks
Mexico's Bolsa stock index rose above 18,000 for the first time, led by Wal-Mart de Mexico SA, Latin America's largest retailer, on expectations that the central bank will continue cutting interest rates early next year.
The index rose to a record for a third day, gaining 209.82, or 1.2 percent, to 18,029.50 at 3:12 p.m. New York time. The Bolsa has surged 4.8 percent since Dec. 8, the day before Mexico's central bank cut its benchmark lending rate more than expected to 8.25 percent. The cut followed a government report that
Brazil's main stock index rose for a third week as slowing inflation spurred expectations the central bank will cut interest rates this month.
The Bovespa index of the 57 most traded stocks of the Sao Paulo stock exchange rose 479.85, or 1.7 percent, to 29,307.91, making a 3.5 percent gain this week, a third weekly gain. Gerdau SA, Latin America's largest steelmaker, led the weekly gain. Elsewhere in the region, Mexico's Bolsa rose 156.96, or 1 percent, to 15,212.88, for a 3 percent weekly gain.
Brazil's annual inflation rate dropped to a 15-month low of 6.02 percent in August, the
