“It seems to me that we could assess the magnitude of the adjustments to the reference interest rate in our meetings going forward, given the levels of inflation that we have been observing,” Rodríguez said Monday night in an interview with Reuters.
Banxico will announce its next monetary policy decisions on November 14 and December 19.
The most recent rate cut approved by Banxico’s five-member Governing Board was not unanimous. Deputy Governor Jonathan Heath voted to keep the rate at 10.75%.
Mexico’s annual inflation slowed more than expected to 4.66% in the first half of September, official data showed last week, its fourth consecutive fortnight of decline. Core inflation moderated to 3.95%, its lowest level since early 2021.
“This movement in the inflationary outlook tells us that it is appropriate to reduce the level of monetary tightening, although we are also recognizing that we continue to face challenges in the inflationary outlook,” Rodríguez said.
Last week, Banxico slightly revised downward its forecast for annual headline inflation in the fourth quarter to 4.3%, from 4.4% previously, while also adjusting its expectation for core inflation to 3.8% from 3.9% previously.
“The inflation outlook has been improving very significantly,” added the head of Banxico.
Mexico’s incoming president, Claudia Sheinbaum, will take office this Tuesday and, according to Rodríguez, the first female president in the Latin American country’s history will receive an economy in a “solid position.”
In Rodríguez’s words, Mexico has sustainable external accounts, a very moderate current account deficit, a resilient banking system and adequate levels of international reserves, despite the fact that this year the fiscal deficit would be close to 6% of GDP, the highest high since the 1980s.
