When the President was given the graph yesterday morning with the result of inflation from last April and its annual reduction to 6.25% of the National Consumer Price Index, the truth is that he did not understand him very well and he better took refuge in their commonplace of the strength of the peso against the dollar.
And so, totally involuntarily, Andrés Manuel López Obrador endorsed the restrictive policy of the Bank of Mexico which, with high interest rates, helps the peso to remain strong against the dollar, beyond the central cause of this strength. which is the weakness of the dollar against many currencies.
The point is that it cannot be ruled out that someone could slip the idea to the President that with inflation like this, so close to 6%, there would be no reason to keep interest rates above 11 percent.
It can happen, López Obrador supports unusual approaches, for example, from the energy sector, which are clearly contrary to the interests of the country or even common sense, but the voices he hears are ignorant and dogmatic, and he buys those arguments.
The reality, speaking of the inflationary issue, is that with the data published by the Inegi last month, there are more doubts as to whether the time has really come to end the increases in the interbank interest rate or whether one more increase of another would be necessary. quarter point. A decrease is out of the question for now.
Non-core inflation is volatile by definition and, in addition to the falls in some energy companies, the reduced electricity rates in some hot cities in the country caused that index to achieve 2.12% annual inflation.
But, at the same time, at the heart of inflation, core inflation, rose last month by 0.39%, to give an annual record of 7.67 percent.
That subjacent inflation is the indicator that most influences the Banxico’s Governing Board, because it is there that economic agents have to be convinced that it is time to contain price increases.
But it seems that the Bank of Mexico has not been able to make that message clear and the upward pressures of many prices continue with everything and that the interest rate is at an impressive 11.25% per year.
It therefore does not seem that Banxico’s next move is so clear with subjacent inflation that is clearly not accelerating its downward curve towards the bank’s own target.
Isn’t the pause in the increases in the cost of money automatic after the Federal Reserve decided to give a last one? increase in its interbank rate.
The Bank of Mexico has left all the weight of the “communication” of its monetary policy at the level of the interest rate. Come on, they want the current 11.25% to speak for itself, without making the voice of the bank propose a route that economic agents can follow.
In short, the Bank of Mexico has not made something clear that today the door is open to a new increase in the interest rate next week.
With the data published by the Inegi last month, there are more doubts as to whether the time has really come to end the increases in the interbank interest rate.
