MEXICO CITY, Oct 2 (Reuters) - Longterm weakening of Mexico’s peso could boost inflation, Central Bank board member Manuel Sanchez said in a speech posted on the bank’s website on Friday.
“The persistence of exchange rate depreciation could fuel greater pass-through to prices, affecting inflation expectations and unleashing other second-round effects,” he said.
Mexico’s peso has touched a series of record lows in recent months on fears that an expected U.S. Federal Reserve interest rate hike will drive investors out of risky emerging market assets. Nevertheless, inflation has remained tame. (Reporting by Alexandra Alper, Editing by Franklin Paul)