MEXICO CITY (Reuters)

Mexican central bank deputy governor Jonathan Heath, in a recent interview, emphasized that the nation’s benchmark interest rate should remain at its current level for an extended period.

In a podcast with Banorte, Heath noted that even as core inflation approaches the central bank’s target, maintaining high rates is still necessary.

Heath was the only dissenter during last month’s monetary policy decision, voting to keep the rate at 10.75% while others voted to cut it to 10.50%.

As of mid-September, Mexico’s annual headline inflation has decreased to 4.66%, marking four consecutive declines. Core inflation is now at 3.95%, the lowest since early 2021.

The central bank aims for an inflation target range of 3%, plus or minus one percentage point. Heath also highlighted the need to address the persistent issue of services inflation.

He stated that if inflation continues to decline in the fourth quarter, it may lead to a normalization of monetary policy.