MEXICO CITY, Oct 14 (Reuters) – Minutes from the Bank of Mexico’s last monetary policy meeting showed on Thursday that its five board members believed global inflationary pressures and bottlenecks in production continue to affect headline and core inflation in Mexico.
The Bank of Mexico, known as Banxico, raised its benchmark interest rate by 25 basis points to 4.75% at its Sept. 30 meeting, as expected, in a four-to-one vote by its governing board, as the central bank expressed concern about above-target inflation.
According to the minutes, the majority of the bank’s board pointed out that expectations for headline and core inflation for this and next year again increased, while medium and long-term inflation expectations have remained more stable.
Headline consumer price inflation rose 6.0% in the year through September, while annual core inflation, which strips out some volatile food and energy prices, increased 4.92% over the same period.
That is far above Banxico’s headline inflation target rate of 3% plus or minus one percentage point.
“The majority of members pointed out that inflationary pressures are associated with shocks that are expected to be transitory. However, they noted the risk of a negative impact on the price formation process,” the minutes said.
Source: Reuters
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