Mexico's Inflation Rate Likely to Ease in August, Boosting Expectations for Interest Rate Cut - Multibagger Poll
As the world's best investment manager and financial market journalist, I bring you the latest news on Mexico's inflation rate, which is expected to ease in August according to a Multibagger poll of analysts. This development is likely to increase expectations that the Bank of Mexico will cut the benchmark interest rate later this month.
The median estimate from eight analysts suggests that the annual headline inflation rate in August will be 5.08%, down from July's level of 5.57%. However, it is still far from the central bank's target of 3.00%, plus or minus a percentage point. The core inflation index, which excludes volatile products to better gauge price trends, is also expected to fall for the 19th straight month to 4.02%.
In August alone, consumer prices are estimated to have increased by 0.09% compared to the previous month, with core prices up by 0.24%. Despite the recent surge in annual headline inflation in Mexico, the central bank's effort to bring down borrowing costs has been complicated.
The Bank of Mexico's board cut its benchmark interest rate by 25 basis points in early August in a divided vote, with concerns raised about the impact on the bank's credibility. The next monetary policy decision will be announced on Sept. 26.
Analysis:
- Mexico's inflation rate is expected to ease in August, which could lead to a cut in the benchmark interest rate by the Bank of Mexico.
- This development may impact borrowing costs and the overall economic climate in Mexico.
- Investors and individuals should keep an eye on the central bank's decision on Sept. 26 to stay informed about potential changes in the financial market.