Mexico annual inflation leaps to 8.70% in August


Mexico’s peso was the sole decliner among major Latin American currencies on Thursday, September 8th, after inflation in August was seen racing to a more than two-decade high, while Brazil’s real outshined peers on a boost from stronger commodity prices.

Annual inflation in Latam’s second-largest economy rose to 8.70% last month, the highest in nearly 22 years. The peso slipped 0.3% while stocks fell 0.2%.

“This will strengthen the case for Banxico to deliver a third consecutive 75 bps rate increase this month, but with Mexico’s economy struggling and the Federal Reserve likely to slow the pace of tightening, Banxico could opt for 50 bps,” said Jason Tuvey, senior EM economist at Capital Economics.

“The bigger picture is that Mexico’s tightening cycle is drawing to a close,” Tuvey concluded.

Source: El Financiero

Mexico Daily Post