MNI BRIEF: Service Inflation Still High - Banxico Minutes

All Central Bank of Mexico board members noted services inflation does not yet show a clear downward trend, as deputy governor Omar Mejía highlighted in his dissent in favor of a 25 basis point rate cut last meeting that policymakers should not put too much emphasis on core inflation movements, minutes released Thursday showed.

"It is also appropriate to conduct monetary policy with a prospective approach and refrain from overweighing the evolution of non-core inflation, over which monetary policy has little incidence. In view of the above, I believe it is appropriate to make an adjustment to the monetary restriction," Mejía said in the report.

Last month, Banxico maintained its overnight interbank interest rate at 11% for the second consecutive meeting, with Mejía dissenting in favor of a 25 basis point rate cut. The board's statement indicated that the inflationary environment might allow for discussing rate cuts at upcoming meetings. (See MNI INTERVIEW: Banxico Likely To Cut Twice In 2024-Covarrubias)