| | |  Business News | September 2009 
Mexico Inflation Cools in August on Recession
 Jason Lange & Luis Rojas Mena - Reuters
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September 10, 2009
Mexico City - Mexico's inflation rate fell more than expected in August as a steep recession made it harder for companies to raise prices, though the central bank is still expected to hold interest rates steady this month.
Consumer prices rose 5.08 percent in the 12 months through August MXCPIA=ECI, down from a 5.44 percent reading in July, the central bank said on Wednesday.
Mexico's economy will likely shrink 6.8 percent this year, its worst contraction since 1932, the finance ministry said on Tuesday.
Mexico's central bank has slashed interest rates this year to fight the recession, but last month held borrowing costs steady and said it was extending a pause announced in July.
Most analysts expect the bank to hold its overnight interest rate steady at its Sept. 18 monthly policy review, and interest rate futures did not move following the price report. That suggests investors are still betting the bank will keep rates on hold this month.
Mexican consumer prices rose 0.24 percent in August MXINFL=ECI. The median expectation in a Reuters poll was for a rise of 0.26 percent.
The core consumer price index MXCPIX=ECI, which strips out some volatile food and energy prices, rose 0.21 percent in August.
In July, headline consumer prices rose 0.27 percent, while core prices climbed 0.34 percent.
(Editing by James Dalgleish) |
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