By MEXICO CITY (Reuters) – Mexican central bank deputy governor Jonathan Heath, in an interview published on Wednesday, said that the nation’s benchmark interest rate should stay at its current level for longer.
Heath, in a podcast with bank Banorte, said that even though core inflation is coming toward the monetary authority’s target, the need to keep rates high still persists.
The central bank board member was the sole dissident in last month’s monetary policy decision, voting to hold the rate at 10.75% when the others moved to cut the rate to 10.50%.
Mexico’s annual headline inflation slowed to 4.66% in the first half of September, its fourth consecutive fortnight of declines. Core inflation moderated to 3.95%, its lowest level since early 2021.
The central bank’s inflation target range is 3%, plus or minus one percentage point.
Heath added that there was the need to break the stubbornness of services inflation.
If inflation comes down in the fourth quarter of this year, “then we could be on the path toward a normalization in monetary policy,” he said.