Mexico inflation descent to be long, slow process, board member says
MEXICO CITY (Reuters) – Headline and core inflation charges in Mexico are nonetheless very excessive, and bringing them down might be a prolonged course of, Mexican central financial institution board member Gerardo Esquivel mentioned in a podcast revealed by Mexican financial institution Banorte on Wednesday.
Esquivel, thus far probably the most dovish member of the Financial institution of Mexico’s board, mentioned the financial institution anticipated inflation would peak within the second quarter of this yr, however would solely converge in the direction of its 3% goal in the direction of the primary three months of 2024.
“It will likely be a protracted, sluggish course of, slower than we might have preferred,” he mentioned within the podcast.
The board member advised rates of interest in Mexico might in 2023 be a “little bit increased” than at current.
However he additionally famous that the very fact the Financial institution of Mexico didn’t reduce its rates of interest to zero, or close to zero, earlier than the present tightening cycle, and had begun elevating rates of interest forward of different central banks, might give it extra room for maneuver.
“It could be that we’ve a little bit extra space to not need to undertake a financial stance that’s as restrictive as maybe different international locations are going to need to,” Esquivel mentioned.
The central banker famous that inflationary pressures that had began mounting with the COVID-19 pandemic elevated after Russia invaded Ukraine a month in the past.
(Reporting by Ana Isabel Martinez and Dave Graham; Writing by Valentine Hilaire; Enhancing by Alex Richardson)
