MNI BRIEF: Banxico Core CPI Worry As Headline Falls- Minutes

All Central Bank of Mexico board members highlighted the recent fall in inflation as a consequence of a decline in the non-core component while expressing concern that core inflation remained stable, minutes of the latest meeting released Thursday showed.

“Most members pointed out that, thus, headline inflation was once again within the variability interval,” the document said. The 3% goal allows a range of 1 percentage point in each direction.

Banxico slowed the pace of its easing this month, reducing its overnight interbank rate 25 basis points to 7.75%, signaling more cuts ahead without specifying the size. Deputy Governor Jonathan Heath dissented in favor of holding.

"Progress towards meeting the inflation target, particularly as indicated by the core component, remains stalled. The narrowing of the gap between observed inflation and the 3% target is entirely attributable to adjustments in its non-core component that could easily revert," Heath argued in the minutes. (See MNI EM INTERVIEW: Banxico Mulling More Gradual Policy - Mejia)