By (Reuters) – Mexico’s annual inflation slowed more than expected in the first half of September, official data showed on Wednesday, paving the way for the country’s central bank to deliver another interest rate cut at a meeting later this week.
In Latin America’s second-largest economy, 12-month headline inflation came in at 4.66% in early September, statistics agency INEGI said, below both the previous month’s 5.16% and the 4.73% forecast by economists polled by Reuters.
The key figure remains above the Bank of Mexico’s (Banxico) 3% target, plus or minus one percentage point, but will likely open the door for it to maintain a monetary easing cycle on Thursday, when it is set to announce its next policy decision.
Mexico’s central bank last month lowered borrowing costs by 25 basis points to 10.75% in a divided vote, and market participants expect another 25-basis-point cut to 10.50% this week, according to a Reuters poll.
In the first half of September alone, INEGI data showed, Mexico’s consumer prices increased 0.09%, while economists in a Reuters poll expected a 0.15% rise.
