(Bloomberg) — Mexico’s inflation accelerated more than expected in June, complicating central bank’s efforts to cut interest rates that remain near an all-time high.
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Consumer prices rose 4.98% from a year earlier, above the 4.87% median estimate of analysts in a Bloomberg survey. Core inflation, a metric that strips out volatile components and that the Mexican central bank watches closely, slowed to 4.13%, slightly below the 4.14% median estimate.
The central bank, known as Banxico, in June maintained borrowing costs at 11%, in a 4-1 split vote that had the dissenting member voting for a small cut. Governor Victoria Rodriguez said recent progress in the disinflation process would allow it to discuss lowering rates in the future.
“The worry now shouldn’t be general inflation. The fact that core inflation has been slowing, even if at a lower rate, should be enough of a positive sign for Banco de Mexico,” said Joan Enric Domene Camacho, Latin America economist at Oxford Economics. The bank “should be focused on services inflation.”
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