Mexico annual inflation hits 6.85% in March, below forecasts

(Reuters) – Mexicos consumer prices slowed more than expected in the year to March, data from statistics agency INEGI showed on Wednesday.

The headline index rose 6.85% in the year through March, below the 6.90% expected by economists polled by Reuters, as prices climbed 0.27% in the month, against a 0.31% market consensus.

The new data comes as leaders of Latin American countries, including Mexico, Chile, Argentina, Brazil and Colombia, will meet virtually on Wednesday to discuss trade measures aimed at combating rising inflation in the region.

The measures to be proposed include “getting rid of tariffs, eliminating red tape for imports, exports, with the purpose of ensuring sufficient supply and fighting shortages,” Mexican President Andres Manuel Lopez Obrador said last month.

Last week the Bank of Mexicos five-member governing board unanimously voted to hike the benchmark interest rate by 25 basis points to 11.25%, moderating the pace of its tightening cycle and taking a more dovish tone on the future of rate moves.

With the latest increase, the 15th in a row and which was in line with market expectations, Banxico has raised its key interest rate by 725 basis points since its rate-hiking cycle started in June 2021 to combat inflation.

(Reporting by Natalia Siniawski, Editing by Angus MacSwan)