By www.CentralBankNews.info Mexico’s central bank held its benchmark target for its overnight rate steady at 4.0 percent, saying the recent rise in inflation was temporary and there are no widespread pressures so inflation should resume its downward trend in June and then gradually move toward’s the bank’s 3.0 percent target.
The Bank of Mexico, which last month cut its rate for the first time since July 2009 but stressed it was not embarking on a new cycle of easing, said inflation was expected to remain high in April and May and then settle around 3-4 percent during the second half of the year before declining to around 3 percent in 2014.
A rise in Mexico’s inflation rate to 4.72 percent in the first half of April from 4.25 percent in March and 3.55 percent in February strengthened expectations that the bank would not cut rates further.
Mexico’s core inflation rate is expected to remain close, and even below, the bank’s 3.0 percent target for most of 2013 and 2014, the central bank said, adding that it would keep a close eye on prices to ensure that there are no second-round effects of the rise in inflation.