(Reuters) – Mexico’s annual inflation rate slowed to its lowest level in almost four years in the first half of January, official data showed on Thursday, settling under 4% and bolstering bets the central bank will continue to lower borrowing costs.
In Latin America’s second-largest economy, 12-month headline inflation came in at 3.69% in early January, statistics agency INEGI said, the lowest since February 2021 and within the central bank’s 3% target, plus or minus one percentage point.
Annual inflation was below both the previous month’s 4.44% and the 3.78% forecast by economists polled by Reuters.
In December, the Mexican central bank delivered its fifth interest-rate cut last year, taking it to 10.00% with a 25-basis-point reduction. At the time, the bank’s board noted that further and larger cuts could be considered in the future.
Mexico’s closely watched core consumer price index, considered a more reliable measure of price trends as it excludes volatile energy and food prices, rose 0.28% in the fortnight.
The annual core rate came in at 3.72%, exceeding market predictions of 3.68% and the previous month’s 3.62%.