Bank of Mexico sees easing of inflation risks, but further rate increases are possible

On November 10, the monetary policy protocol of the Bank of Mexico was released. It says about a possible increase in interest rates in the future due to the growth of core inflation. However, the bank's board of governors agreed that some of the factors affecting inflation are weakening.

At the last meeting of Mexico's central bank, called Banxico, there was a 75 basis point increase in the key interest rate, which reached a record level of 10.00%.

The protocol indicates that all participants came to an agreement on the emergence of signs that the effect on inflation from some negative factors has weakened. In addition, signs show a reduction of pressure on supply chains.

The influence of LP gas prices on non-basic inflation decreases also came under the attention of all five members of the Banxico board.

Meanwhile, most members noted an increase in short-term inflation expectations.