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Investing.com -- Mexico’s annual inflation rate for April matched market expectations, according to official data released on Thursday. The inflation rate accelerated compared to the previous month, but remained within the target range set by the country’s central bank.
The inflation rate’s alignment with expectations should allow the Bank of Mexico, also known as Banxico, to continue reducing borrowing costs in Latin America’s second-largest economy. This move is seen as necessary due to a weakening trend in the face of increasing global trade uncertainties.
Consumer prices in Mexico increased by 3.93% in the year leading up to April, as reported by the national statistics agency INEGI. This figure aligns with economists’ predictions and is an increase from the 3.8% inflation rate of the previous month.
Banxico has set an inflation target of 3%, with a tolerance of plus or minus one percentage point. In the previous month, the bank reduced its interest rate by 50 basis points for the second consecutive time, bringing it to 9%, the lowest it has been since September 2022. Policymakers have indicated that if inflation remains stable as expected, further easing measures will be implemented.
In April alone, consumer prices saw an increase of 0.33%, according to non-seasonally adjusted figures. Meanwhile, the closely monitored core index, which removes some volatile food and energy prices, rose by 0.49%. Both of these figures were in line with market predictions.
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