Inflation Remains Below Banco de Mexico's 3% Target Nacha Cattan and Eric Martin - Bloomberg
go to original July 7, 2016

Mexico’s consumer prices rose less than expected in June, keeping the annual inflation rate below the central bank’s target.

Prices rose 0.11 percent from the month before, the national statistics institute said on its website Thursday. The median forecast of 24 analysts surveyed by Bloomberg was for a 0.16 percent increase. From a year earlier, prices increased 2.54 percent, compared with 2.6 percent in May. Banco de Mexico targets inflation of 3 percent.

Mexico raised its key interest rate more than expected last week, by a half point to 4.25 percent, after the peso plunged on the U.K.’s vote to leave the European Union, outweighing concern about the domestic economy’s weakness. While annual inflation has remained below the central bank’s target for a year, policy makers have expressed concern that the peso’s weakness will push up the cost of imports and pressure consumer prices higher.

The peso rose 0.1 percent to 18.718 per dollar at 8:03 a.m. in Mexico City. The currency hit a record low after the Brexit vote and was down 8.2 percent this year through Wednesday, the worst performer among major currencies tracked by Bloomberg after the British pound.

Read the rest at Bloomberg

Related: Mexico Auto Production, Exports Rise in June (Reuters)

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