Mexican inflation stayed well above the Bank of Mexico’s target range during the first half of May, national statistics agency INEGI said on Monday, boosting the view the bank has concluded its easing cycle and is moving towards a rate hike.
Annual headline inflation stood at 5.80% in the year through the first half of May, while consumer prices fell 0.01% in the first 15 days of May compared to the previous two-week period.
Analysts polled by Reuters had expected annual inflation to ease to 5.66% in the first half of May from 6.12% in the second half of April. They forecast prices would decrease by 0.15% in the first 15 days of May.
The closely watched core price index, which strips out some volatile food and energy items, climbed 0.33% in early May. Annual core inflation was 4.22%.
“The sticky and gradually disseminating inflation pressures are one among other domestic and external factors that have contributed to close the window for additional monetary easing and reinforce the view that the next policy move is a rate hike with the horizon for liftoff shortening to 1H2022, with an outside chance of late 2021,” said Alberto Ramos, economist at Goldman Sachs.
The Bank of Mexico on May 13 kept its benchmark interest rate steady at 4% in a unanimous decision.
Source: Yahoo Finance
