Mexico’s inflation eases to lowest in two years

(Reuters) – Mexico’s headline inflation eased in the first half of July to its lowest level in more than two years, the national statistics agency said on Monday.

In Latin America’s second largest economy, 12-month headline inflation reached 4.79% in the first half of July, the lowest since March 2021, slowing further but still above the central bank’s official target of 3%.

The level was also slightly above the 4.77% predicted by economists polled by Reuters.

INEGI data showed that annual core inflation, which strips out some volatile food and energy prices, slid to 6.76% in the first two weeks of July.

Economists polled by Reuters had expected it to hit 6.73%.

Last month, Mexico’s central bank board members made the unanimous decision to keep its benchmark interest rate at 11.25% for the second time, and said might need to maintain rates at current levels for an extended period to bring inflation down to target.

Banxico first paused its rate hikes in May after a nearly two-year hiking cycle that began in June 2021.

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