EUNICE.IO – In a strategic revelation, Mexico’s Deputy Governor of the Central Bank, Jonathan Heath, indicated that interest rates are expected to maintain their current level at 11%, which could extend beyond market anticipations. Heath emphasized during his discussion at the sidelines of the IMF and World Bank spring meetings in Washington that the outcome of the May policy gathering is to keep the rates steady. Additionally, any adjustments in June will rely heavily on newly assessed economic data.

Heath further explained the critical situation surrounding service sector inflation and its trajectory, which could signal potential rate cuts ranging from two to four within the year, contingent on economic fluctuations. The possibility of rate adjustments hinges significantly on whether inflation targets are achieved. As of now, Mexico grapples with an inflation rate that hastened past expectations, idling above the Central Bank’s goal of 3%, with a possible deviation of one percentage.

Experts have voiced concerns over premature rate cuts which could destabilize the economic recovery. The policy decisions going forward, according to Heath, need a concerted effort to surmount persistent inflation, underpinned by strong wage growth and a tightening labor market which complicates the trajectory towards stabilization.

Category: Financial