Mexico

Mexican consumer prices rose less than expected in early March, the national statistics agency said on Thursday, backing bets the central bank could slow the pace of its monetary tightening later this month, Reuters reported. Annual headline inflation in the first half of March hit 7.12%, down from 7.48% in the second of half of February and below market expectations. Mexican core inflation, which strips out volatile food and energy products and has in recent months been more stubborn than headline inflation, was 8.15% in annual terms.

A cohort of TV Azteca SAB’s creditors filed a petition to force the Mexican broadcaster into involuntary bankruptcy in the U.S., the latest twist in drawn-out debt talks, Bloomberg News reported. Holders of about $63 million of unsecured Azteca bonds filed an involuntary chapter 11 petition against the company in New York, according to court papers on Monday. The move marks the second attempt by bondholders to get traction for their claims against Azteca after it defaulted on the $400 million of notes in 2021.

Bank of Mexico's main focus is tackling inflation, deputy governor Galia Borja said on Thursday, when asked how fears of a banking crisis roiling U.S. and European markets could impact monetary policy at the central bank, Reuters reported. "Many variables come into play," Borja told Reuters on the sidelines of a banking convention in the city of Merida in Mexico's Yucatan peninsula. "But the main one is inflation, which is our mandate." "The behavior of inflation is more important, but we take everything into account," she added.

Mexico's inflation likely slowed in February but still remained well above the official target, fueling expectations the central bank will raise its key rate again in its next monetary policy announcement at the end of March, Reuters reported. The median forecast of 17 analysts shows annual inflation at 7.69% in February, down from the 7.91% posted in January, but nevertheless far above the Bank of Mexico's target of 3% plus or minus one percentage point.

Mexico’s central bank trimmed its economic growth forecasts for this year and next, after raising borrowing costs more aggressively than expected in February, Bloomberg News reported. Banxico, as the central bank is known, estimates that gross domestic product will expand 1.6% in 2023, according to the main scenario of its quarterly inflation report released Wednesday. That’s below the 1.8% seen in the previous report, which was published Nov. 30. For 2024, it forecasts growth of 1.8%, down from 2.1%.

Mexican President Andres Manuel Lopez Obrador said on Thursday he will launch a plan to tame inflation with other Latin American governments, Reuters reported. Lopez Obrador said he has already spoken with the presidents of Brazil, Argentina, Cuba and Colombia to join forces in a plan that seeks to remove tariffs to reduce the price of food items. "We are going to carry out an anti-inflationary plan of mutual aid and growth, for economic and commercial exchange between Latin American countries," the president said in a regular news conference.

Omar Mejia, recently appointed deputy governor of Mexico's central bank, said on Wednesday the institution could consider slowing the pace of raising its key interest rate and the economy should continue to grow this year despite tight monetary policy, Reuters reported. "I believe that going forward we could consider slowing the pace of rate adjustments, as it is already very close to the appropriate level to consolidate a de-inflationary process," he said in a podcast interview with Grupo Financiero Banorte.

Bank of Mexico board member Jonathan Heath said in a newspaper interview published on Monday that he does not see the central bank's benchmark interest rate reaching 12%, Reuters reported. "In my very personal opinion and based on the data available today, I do not see the terminal rate reaching 12%, but rather I estimate that it will be located in a range of 11.25% to 11.75%," Heath told newspaper El Financiero. The central bank's governing board raised its key interest rate to a record 11% this month amid stubborn inflation.

Mexico's headline inflation decelerated more than forecast by analysts in early February, data from the national statistics agency showed on Thursday, Reuters reported. Annual headline inflation in the first half of the month came down to 7.76% from 7.94% a month earlier, while economists polled by Reuters had forecast 7.80%. Meanwhile the core index, which strips out some volatile food and energy prices, hit 8.38% on an annual basis, with a surprise of -0.04%. However, annual inflation still remains above the Bank of Mexico's target rate of 3%, plus or minus one percentage point.

The Bank of Mexico's monetary tightening cycle is nearing its end and nominal interest rates could top out between 11.25% and 11.75%, at which point rates would be kept steady to allow them to take effect, deputy bank governor Jonathan Heath said, Reuters reported. Banxico, as the Mexican central bank is known, has raised its benchmark interest rate by 700 basis points since its rate-hiking cycle started in June 2021, as inflation surged far beyond its target of 3%, plus or minus 1 percentage point.