MEXICO CITY (Reuters) – Inflation in Mexico is likely to have eased in the first half of August from a year earlier, a Reuters poll showed on Monday, bolstering arguments for the central bank to cut its benchmark interest rate again at its meeting next month.
The average forecast of ten analysts predicted inflation of 5.33 percent for the first two weeks of the month. This is lower than the 5.52 percent in the second half of July, but still far from the central bank’s target of 3 percent plus or minus one percentage point.
For the closely watched core inflation index, which excludes highly volatile products, analysts forecast a slight decline from 4.08 percent to an increase of 4.04 percent.
Earlier this month, the Bank of Mexico (Banxico) cut its key interest rate by 25 basis points to 10.75 percent in a close decision by the bank’s board of directors.
Lieutenant Governor Jonathan Heath, one of two board members who voted against the cut, said at an event on Friday: “The moment when we can cut interest rates more systematically is already upon us.”
Banxico’s next monetary policy announcement is scheduled for September 26, a week after the U.S. Federal Reserve meeting, where policymakers are expected to launch a much-anticipated series of interest rate cuts.
In the first 15 days of August, headline prices likely rose 0.13 percent compared to the previous 15-day period, while the core index is expected to rise 0.19 percent, the survey said.
The Mexican national statistics institute INEGI will publish inflation data for the first half of August on Thursday.
