Inflationary rebound will not prevent Banxico from cutting rates in March

Mexico City – Inflation in Mexico more than by the market in early 2024 after a significant rebound in fruit and vegetable prices, however, five analysts believe that The inflationary rebound will not prevent the Bank of Mexico ( Banxico) cuts the interest rate in March. General inflation annually,  Inegi, which was above what wasby the consensus of the Citibanamex Expectations Survey and  the average by the Bank. of Mexico (Banxico) for the first quarter of the year. Core inflation stood at 4.78% annually in the first half of January. In line with the market and following the path of deceleration by showing the lowest figure in 23 fortnights, however, it was Non-core inflation  significantly to reach a level of 5.24% annually. the highest level in almost a year. The increase in the price of products such as tomatoes, green tomatoes and onions  to the rise in non-core inflation.

Sgnificantly to reach a level

Tomato was the product that the most in price and with the greatest impact on the National Consumer Price Index (INPC), this basic basket product Saudi Arabia Phone Number List by 25% in the first half of January alone. Analysts from Vector Casa de Bolsa, Grupo Financiero Banorte, Finamex Casa de Bolsa, Banco Bx+ and Invex Banco see the rebound in non-core inflation as a risk for general inflation, with the understanding that it is a volatile component but this It would not be an impediment for the central bank to cut the interest rate – today at a level of 11.25% – at the March monetary meeting. The governor of Banxico, Victoria Rodríguez Ceja, declared at the end of last year that the central bank would evaluate an interest rate adjustment in the first quarter of 2024, which reinforced analysts’ bet on a cut in the benchmark index in March .

In a note that the Members

Analyst at Vector Casa de Bolsa, said in a note that The surprise of the increase in inflation does not support the narrative of an interest rate Turkey Phone Number List cut by Banxico, although the shock comes from non-core prices that significantly. “We will be attentive to the communication of the next monetary policy decision on February 8. The probability of an interest rate cut during the March meeting remains, at least for the momen. Alejandro Padilla, chief economist of Banorte,  in a note that the Members of the Banxico Governing Board will focus on the dynamics of underlying inflation. Highlighting its downward trajectory. The weight they give to the performance of the non-core will be relevant.  Especially if they believe the shocks could be more transitory or permanent.

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