Inflation in Mexico accelerates to 4.48% in the first half of March
Data was higher than expected and impacted in the forex market. USD/MXN is trading lower after the news.
In the first half of March, the Consumer Price Index showed a bi-weekly variation of 0.27%, while on a yearly comparison, the rate was 4.48%.
Consumer inflation continued to remain outside the target range of the Bank of Mexico (Banxico) in the first half of March, according to information released by the National Institute of Statistics and Geography (INEGI).
Data was lower than expected and impacted in the forex market. USD/MXN is trading lower after the news, marking an appreciation of the Mexican peso.
In the first half of March, the National Consumer Price Index (NCPI) showed a bi-weekly variation of 0.27%, while on a yearly comparison, the rate was 4.48%.
Thus, inflation remained above the Banxico’s target of 3% +/- 1 percentage point, and it accelerated from the 4.35% annual figure in the second half of February.
Banxico’s estimates project that inflation will reach 3.5% in the fourth quarter of this year. Meanwhile, the precise target of 3% is expected to be achieved until the second quarter of 2025.
Just on Thursday, the central bank cut its interest rate by 25 basis points, lowering it to 11 percent. This was the first rate cut in three years, given the high levels of inflation.
“The actions to be implemented will ensure that the reference rate is consistent, at all times, with the required path to promote the orderly and sustained convergence of general inflation to the 3% target within the expected timeframe. The Central Bank reaffirms its commitment to its primary mandate and the need to persevere in its efforts to consolidate an environment of low and stable inflation,” the institution stated.
Within the INEGI report, it was observed that pressures continued to be concentrated in the core category, which excludes the prices of the most volatile goods and services.
In the first half of March, the core category recorded an inflation rate of 4.69% annually. Within this, goods experienced a price increase of 3.96%, while services — now the major pressure point — rose by 5.57%.
Regarding non-core inflation, INEGI reported that it stood at 3.84% annually in the first half of the month.
This was explained by a 4.69% annual increase in the prices of agricultural products, while energy and government fees rose by 3.12%.
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