Central Bank of Mexico Deputy Governor Jonathan Heath's dissented in favor of keeping rates on hold last month because he viewed the upward trend in inflation, its volatility beyond the target range, and a worsening balance of risks as having weakened the case for further monetary easing, minutes of the latest meeting released Thursday showed.
“The adjustment made in this decision jeopardizes maintaining a sufficiently restrictive policy stance because it brings it near the upper range of the neutral rate,” Heath said.
All members of the Banxico’s board noted that inflation has increased since the last monetary policy decision, reaching 4.20% in the first half of June.
Banxico cut its policy rate by another 50 basis points to 8.00% last month, with Deputy Governor Jonathan Heath voting to hold rates at 8.50%. The board signaled more cuts ahead without specifying their size. (See MNI INTERVIEW: Banxico Likely To Slow Pace And Pause - Tapia)