Mexico's Inflation Rate

MEXICO CITY (Reuters) – Mexico's annual inflation rate likely fell again in September, according to a Reuters poll of analysts conducted on Monday, raising expectations that the central bank will continue cutting its benchmark interest rate.

The median estimate from 10 analysts suggested that the overall consumer price index (CPI) for September is expected to decline to 4.62%, its lowest level since March. However, this figure would still exceed the bank's official target rate of 3%, plus or minus a percentage point.

Core inflation, which excludes especially volatile food and energy prices, is likely to have eased in September to 3.96%, marking a decrease for the 20th consecutive month.

Last month, the central bank cut its benchmark interest rate for the third time this year, bringing the rate down to 10.50%. The bank's board noted that cooling prices may allow for continued reductions in borrowing costs.

Central bank Governor Victoria Rodriguez indicated last week that future cuts could be larger if the inflation rate continues to decline.

In September, consumer prices likely increased by 0.09% from the previous month, while core prices are expected to have risen by 0.32%, according to the poll.

Mexico's central bank has two more monetary policy decisions planned for later this year, on Nov. 14 and Dec. 19. The institution's most recent survey of analysts showed that most expect the benchmark interest rate to end the year at 10% and decrease to 8% in 2025.

The National Statistics Institute (INEGI) will release official consumer price data for September on Wednesday.