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9mo ago

Peru and Mexico Cut Interest Rates Despite Rising Inflation Concerns

Unexpected rate cuts by central banks in Peru and Mexico challenge traditional inflation-fighting strategies.

FILE - A porter hauls a load of crates at the Central de Abastos, the largest wholesale food and goods market, in Mexico City, Aug. 3, 2022.
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Overview

  • Peru's central bank reduced its benchmark rate to 5.5%, despite core inflation remaining high.
  • Mexico's central bank cut its interest rate to 10.75%, even as inflation surged to 5.57% in July.
  • Analysts expressed surprise at both decisions, citing potential risks to economic stability.
  • Peru's overall inflation has slowed, contrasting with Mexico's rising inflation figures.
  • Both countries' rate cuts reflect a focus on supporting economic growth over controlling inflation.