The Bank of Mexico (Banxico) continues its monetary policy flexibility policy. This Thursday, the Central Bank Government Board has reduced interest rates in 25 bases and places the reference rate by 7.75%. “This, in congruence with the assessment of the current inflationary scenario. In particular, (Banxico) considered the behavior of the exchange rate, the weakness shown by economic activity and the possible impacts in the face of changes in commercial policies globally,” says the agency in its statement.
The decision made by the Central Bank is relevant to the country, taking into account the most recent economic indicators. Inflation in the country has traced in recent weeks. This Wednesday, the National Institute of Statistics and Geography (INEGI) announced that the increase in generalized prices has accelerated by three consecutive fortnights, located at 3.74% at an annual rate in the first half of September.
The rhythm of the reduction of interest rates may be close to its end, since this decision was not unanimous among the seven members of the Governing Board. “The actions that are implemented will be such that the reference rate is consistent, at all times, with the trajectory required to promote the orderly and sustained convergence of general inflation to the 3% goal in the planned period,” says the Central Bank.
Gabriela Siller, director of Economic Analysis of Grupo Base, indicates that with an estimated inflation to 12 months by the analysts surveyed by the same Bank of Mexico of 3.66%, it is estimated that the real interest rate Ex before It is 3.95%, near the upper range of the real neutral rate of 1.8%to 3.6%, where economic activity is not encouraged or restricted. “Cutting the rate another 25 base points would imply placing it just above the neutral terrain, as if inflation does not need to lower more,” says the economist.
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