Bank of Mexico's Caution on Monetary Policy: Insights from Deputy Governor Galia Borja

Deputy Governor Galia Borja of the Bank of Mexico emphasized the importance of avoiding 'hasty decisions' regarding monetary policy. Despite holding interest rates steady at 11.00%, she noted that the inflationary environment may soon warrant discussions on rate cuts. Mexico's inflation rate has increased for four consecutive months, reaching 4.98% in June.

Deputy Governor Galia Borja of the Bank of Mexico stated that avoiding 'hasty decisions' concerning monetary policy is crucial during a podcast interview published on Wednesday.

Last month, the Bank of Mexico maintained its benchmark interest rate at 11.00% due to persistent inflation. Although the inflationary situation may permit discussions on future rate cuts, Borja believes that 'the most prudent thing from a cautious point of view is to wait a while and not make a hasty decision,' as she mentioned on the Norte Economico podcast by Mexican bank Banorte.

Official data released on Tuesday showed that Mexico's annual headline inflation rate has risen for four consecutive months, hitting 4.98% in June. Borja recognized that the current monetary policy is 'undoubtedly restrictive,' designed to help achieve the inflation target over the forecast horizon.

(With inputs from agencies.)