MEXICO CITY (Reuters) – The Bank of Mexico’s five-member governing board expects that easing inflation could allow further reductions to its benchmark interest rate, minutes from the bank’s September monetary policy decision showed on Thursday.
Banxico, as the Mexican central bank is known, lowered its key lending rate on September 26 by 25 basis points to settle at 10.50% following a four to five vote by its governing board.
Minutes showed that most board members agreed that Mexico’s inflation outlook has been improving, with all members noting that core inflation in Latin America’s No. 2 economy continued to trend downwards.
Most of the board, however, warned that inflationary pressures still pose a challenge.
Twelve-month headline inflation in Mexico hit 4.58% in September, down from the August figure of 4.99%, fueling expectations that Banxico may continue cutting the interest rate.
Still, all board members underscored that services inflation continues showing persistence.
(Reporting by David Alire Garcia and Anthony Esposito)
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