MEXICO CITY (Reuters) -Mexico’s central bank may pause cuts to its benchmark interest rate in the face of an inflationary rebound, deputy governor Jonathan Heath said in an interview with local newspaper El Economista published on Wednesday.
Mexico’s annual inflation rate accelerated in May and exceeded the upper-end of the central bank’s target range of 3% plus or minus one percentage point.
“We expect this small rebound to be temporary and inflation to resume its downward trajectory in the coming months”, Heath said.
The inflationary rebound has created an uncertain landscape for borrowing costs in Latin America’s second-largest economy, but Banxico is expected to cut its key interest rate by another half percentage point in June.
Analysts believe the pace of rate cuts could slow if prices remain under control.
(Reporting by Ana Isabel Martinez; Editing by Chizu Nomiyama)
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