Prior to the release of the CPI figures, there was a lot of conflicting anecdotal information – such as price hikes exceeding the rise in consumption tax and price cuts through discount sales. It turned out, however, that the rise in consumption tax alone has basically been passed on to consumers.
Especially noteworthy have been increasing holdings of peso-denominated government bonds by non-residents, a trend that has only recently slowed. Given the possibility of future bouts of heightened global risk aversion, sudden stops or even reversals of capital flows cannot be ruled out. The authorities remain vigilant to the need for measures to make the Mexican financial system more resilient in such an event.