Consumer prices in Mexico climbed 7.45 percent in the year to March, the highest level since early 2001 and more than double the central bank's target, according to data released on Thursday by the INEGI national statistics office, implying that more interest rate hikes are expected.
Consumer prices also exceeded the consensus prediction of economists polled by Reuters, who predicted that inflation would rise to 7.36 per cent in March, compared to 7.28 per cent in February.
Core inflation, which excludes some volatile food and energy goods, rose 6.78 per cent in the year to March, the highest level since April 2001, according to INEGI data.
The Bank of Mexico, or Banxico, has a three-percentage-point permanent headline inflation objective, with a one-percentage-point tolerance zone above and below that.
Inflation has increased at both the headline and core levels "In the short term, food and energy inflation are expected to rise. Price pressures will remain broad, implying that Banxico's tightening cycle will go longer than most analysts anticipate "Nikhil Sanghani, a Latin America economist at Capital Economics, echoed this sentiment.
Last month, the Bank of Mexico hiked its benchmark interest rate by 50 basis points, marking the bank's seventh consecutive increase, citing tighter global monetary and financial conditions, as well as uncertainties and inflationary pressures related to the Ukraine conflict.
"Persistent inflation risks, alongside the more hawkish U.S. Fed, will put pressure on Banxico to continue tightening over the coming months," said Sanghani.
He expects another 50-basis-point rate hike at the bank's next monetary policy meeting on May 12, as well as at least another 150 basis points of tightening this cycle to bring the rate to 8.50 per cent.
According to non-seasonally adjusted estimates, consumer prices grew 0.99 per cent in March, while the core index rose 0.72 per cent, according to INEGI data.
(Source:www.nasdaq.com)
Consumer prices also exceeded the consensus prediction of economists polled by Reuters, who predicted that inflation would rise to 7.36 per cent in March, compared to 7.28 per cent in February.
Core inflation, which excludes some volatile food and energy goods, rose 6.78 per cent in the year to March, the highest level since April 2001, according to INEGI data.
The Bank of Mexico, or Banxico, has a three-percentage-point permanent headline inflation objective, with a one-percentage-point tolerance zone above and below that.
Inflation has increased at both the headline and core levels "In the short term, food and energy inflation are expected to rise. Price pressures will remain broad, implying that Banxico's tightening cycle will go longer than most analysts anticipate "Nikhil Sanghani, a Latin America economist at Capital Economics, echoed this sentiment.
Last month, the Bank of Mexico hiked its benchmark interest rate by 50 basis points, marking the bank's seventh consecutive increase, citing tighter global monetary and financial conditions, as well as uncertainties and inflationary pressures related to the Ukraine conflict.
"Persistent inflation risks, alongside the more hawkish U.S. Fed, will put pressure on Banxico to continue tightening over the coming months," said Sanghani.
He expects another 50-basis-point rate hike at the bank's next monetary policy meeting on May 12, as well as at least another 150 basis points of tightening this cycle to bring the rate to 8.50 per cent.
According to non-seasonally adjusted estimates, consumer prices grew 0.99 per cent in March, while the core index rose 0.72 per cent, according to INEGI data.
(Source:www.nasdaq.com)
