EconomyTop News

Bank of America sees Mexican inflation rising to 4% this year

imageEconomy12 hours ago (Jul 10, 2020 02:40PM ET)

(C) Reuters. A Bank of America logo is pictured in the Manhattan borough of New York City

MEXICO CITY (Reuters) – Bank of America (NYSE:BAC) revised its inflation forecast for Mexico this year to 4%, from 3.7% previously, the bank said in a research note, adding that the current climate makes further interest rate cuts by the central bank more difficult.

Latin America’s second-largest economy had posted a higher-than-expected inflation rate for June and the Mexican central bank, known as Banxico, did not rule out further rate cuts.

“But we believe further cuts will be data dependent, in particular to developments in inflation and the foreign exchange,” according to the Bank of America research note dated Thursday.

With the U.S. presidential election in the second half of 2020, fiscal concerns in Mexico and the coronavirus still spreading, Bank of America said Banxico’s key overnight lending rate should stay at around 5% for the remainder of the year due in part to core inflation remaining above the central bank’s 3% target.

Mexico’s national statistics agency INEGI said the annual inflation rate picked up in June to 3.33% from May’s 2.84%. It compares with a rate of 3.95% from the same month a year earlier.

A Reuters poll of analysts had forecast annual inflation at 3.20%.

Banxico cut its benchmark interest rate to 5.00% on June 25, the lowest level in nearly four years, citing worries about growth and an uncertain outlook due to fallout from the pandemic.

Bank of America sees Mexican inflation rising to 4% this year

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply

Your email address will not be published. Required fields are marked *