Mexico headline inflation seen slowing in early July to 2021 levels
Business
Mexico headline inflation seen slowing in early July to 2021 levels
MEXICO CITY (Reuters) - Mexico's headline inflation likely eased in the first half of July to its lowest level in more than two years, but still remained above the central bank's target, a Reuters poll showed Friday, reinforcing bets the bank will hold its key rate longer.
The median forecast of 10 analysts see annual headline inflation (MXCPHI=ECI) at 4.77% in the first 15 days of the month, its lowest level since March 2021.
Core inflation (MXCPIC=ECI), which strips out volatile food and energy products, is forecast to have slid to 6.73% year-on-year, marking the eleventh consecutive fortnight of slowdown.
Both still remain well above the central bank's target of 3%, plus or minus 1 percentage point.
Last month, Mexico's central bank board members made the unanimous decision to hold its benchmark interest rate at 11.25% for the second time, and warned that it will be necessary to keep it at that level for a prolonged period of time for inflation to converge to its target.
Banxico first paused its rate hikes in May after a nearly two-year hiking cycle that began in June 2021.
In the first half of July, consumer prices (MXCPIF=ECI) were forecast to have risen 0.27% compared with the previous two-week period, while the core index (MXCPIH=ECI) likely rose 0.22%.
