“PACIC is helping, especially the cap on gasoline prices, if it weren’t there we could face inflation of over 10%,” commented Jonathan Heath, deputy governor of the Bank of Mexico, during his presentation at the eleventh Forum of BMV Group issuers.
To contain inflation, Banxico has raised the reference rate to 7% and Heath points out that for the next monetary policy discussion, in August, they should focus on increasing the rate by 75 points. “We do not have a consistent position with the inflation that we have and that is precisely why we are putting on the table that we have to be more forceful,” said Heath.
According to Heath, inflation should already be hitting the ceiling and from now on it should start to ease, “but we are going to see if this happens or not, because there is a very important assumption that is where we have been failing and that is that we are assuming that there will be no more clashes in the future”, he commented.
The problem is that the safest thing, he pointed out, is that more shocks will be seen that are not anticipated in the estimates. However, he hopes that inflation will not rise much more, “but it is going to stagnate for a longer period than we are thinking and therefore, I believe, that we need to have a monetary stance consistent with the inflationary phenomenon that we are experiencing.” facing”, indicated the deputy governor.
