• Mexican central bank keeps rates unchanged at 11.25%
  • Mexican Central Bank (MCB) points out downside risks, including a larger-than-anticipated slowdown of the global economy, less impact from cost-related pressures, and improvements in production and distribution chains.
  • The balance of risks for inflation within the forecast horizon is biased to the upside according to the MCB.
  • MCB projections face risks such as persistence of core inflation at high levels, foreign exchange depreciation due to international financial market volatility, and greater cost-related pressures.
  • These pressures continue to affect inflation, which remains high and presents a complex outlook.
  • MCB states that the economy has begun a disinflationary process as many pressures have eased.
  • Inflation is projected to converge to the 3% target in the fourth quarter of 2024.
  • MCB will closely monitor inflationary pressures and all factors influencing the path and expectations of inflation.
  • Expectations for 2023 inflation have decreased, while longer-term expectations remain relatively stable at levels above target.
  • MCB reiterates its commitment to low and stable inflation and the need for continued efforts to consolidate such an environment.
  • Both headline and core inflation remain at high levels, and an orderly and sustained convergence of headline inflation to the 3% target will require maintaining the reference rate at its current level for an extended period.
  • MCB predicts a complicated and uncertain inflationary outlook throughout the entire forecast horizon, with upward risks.
  • The labor market remains strong and economic activity has been resilient in a complex external environment.
  • With the decision to keep the interest rate unchanged at 11.25%, the monetary policy remains in the trajectory required for inflation to converge to its 3% target within the forecast horizon.
  • The MCB board unanimously decided on the rate decision.