MNI BRIEF: Base Effect Drove Core Increase - Banxico Minutes

Most Central Bank of Mexico board members believe that the recent increase in core inflation is largely attributable to base effects, given the atypically low monthly inflation registered in the same month of 2024, minutes of the latest meeting released Thursday showed.

"Most members indicated that core inflation increased from 4.24% in the first fortnight of October to 4.43% in November. They noted that said increase in its annual variation is largely attributed to a base effect, given the atypically low monthly inflation registered in the same month of 2024," the document said.

Banxico's inflation target is 3% with a range of 1 percentage point in each direction. Banxico cut rates by 25 basis points to 7.00% last month, with Deputy Governor Jonathan Heath dissenting to hold at 7.25%.

"We need to thoroughly evaluate the time required not only to revert the increasing upward trend exhibited by core inflation in 2025, but also to calibrate the magnitude of a possible reversion of non-core inflation," Heath argued in the minutes. (See MNI BANXICO WATCH: Guidance Shift Suggests Banxico Pause)