LatinNews Daily - 29 September 2023

*Mexico’s central bank (Banxico) has announced that it is maintaining its benchmark interest rate at 11.25% for the fourth consecutive occasion. This is in line with Banxico’s announcement in May that the rate would be held for a prolonged period in order to reduce inflation to the target of 3%. This announcement comes after Mexico’s national statistics institute’s (Inegi) recently released figures for the consumer price index (INPC) for the first half of September, which show that annual inflation rate has decreased to 4.4% from 4.64% in August and 8.76% in the same period of 2022. Core inflation increased 0.27% in the first half of September, while annual core inflation stood at 5.78%. Referencing these figures, Banxico highlighted that both kinds of inflation “remain elevated”, and that “general and core inflation forecasts have been adjusted upward… reflecting a more gradual decrease [in inflation rates] than previously foreseen”. According to Banxico, the unanimous decision to maintain the interest rate at 11.25% is “the required trajectory in order for inflation to align with the goal of 3% within the timeframe of the forecast”. Banxico currently forecasts inflation to reach the target by the end of 2025.