Mexico inflation quickens faster than expected to 20-year high
/ Our Today
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MEXICO CITY (Reuters)
Mexican annual inflation accelerated faster than expected in November to its highest level in over two decades, official data showed on Thursday (December 9), reinforcing bets the central bank will raise its benchmark interest rate again when it meets next week.
Figures from national statistics agency INEGI showed inflation in Latin America’s No. 2 economy jumped to 7.37 per cent last month from 6.24 per cent in October. That, compared with the consensus forecast of a Reuters poll for 7.22 per cent.
The November figure took inflation to its highest level since January 2001.
The core rate of inflation, which strips out some volatile items, reached 5.67 per cent.
The Bank of Mexico (Banxico) last month raised its benchmark interest rate by 25 basis points to five per cent, the fourth consecutive hike. It also revised up its expectations for Mexican inflation at the close of this year.
Banxico’s final monetary policy meeting for the year is due on December 16. The bank targets inflation of three per cent, with a one percentage point tolerance range above and below that.
Earlier this week, Irene Espinosa, a member of the central bank’s board, said Banxico’s monetary policy stance continues to be accommodative and that it should respond forcefully to anchor inflation expectations.
Month-on-month, Mexican consumer prices increased by 1.14 per cent in November, the INEGI data showed. Meanwhile, the core index of prices rose by 0.37 per cent from October.
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