MEXICO CITY – Headline and core inflation rates in Mexico are still very high, and bringing them down will be a lengthy process, Mexican central bank board member Gerardo Esquivel said in a podcast published by Mexican bank Banorte on Wednesday.
Esquivel, so far the most dovish member of the Bank of Mexico’s board, said the bank expected inflation would peak in the second quarter of this year, but would only converge towards its 3% target towards the first three months of 2024.
“It will be a long, slow process, slower than we would have liked,” he said in the podcast.
The board member suggested interest rates in Mexico could in 2023 be a “little bit higher” than at present.
But he also noted that the fact the Bank of Mexico did not cut its interest rates to zero, or near zero, before the current tightening cycle, and had begun raising interest rates ahead of other central banks, could give it more room for maneuver.
“It may be that we have a little more space to not have to adopt a monetary stance that is as restrictive as perhaps other countries are going to have to,” Esquivel said.
The central banker noted that inflationary pressures that had started mounting with the COVID-19 pandemic increased after Russia invaded Ukraine a month ago.
(Reporting by Ana Isabel Martinez and Dave Graham; Writing by Valentine Hilaire; Editing by Alex Richardson)
