The Bank of Mexico could increase the size of cuts to its benchmark interest rate in future meetings as inflation eases in Latin America's second-largest economy, minutes from the central bank's December monetary policy meeting showed on Thursday.

Mexico’s annual inflation eased last month to the lowest level since February 2021, keeping in play a fifth straight interest rate cut at the central bank’s next policy meeting.

Mexico’s annual inflation rate dropped to a nearly four-year low of 4.21%, representing a notable decline of 0.34% from 4.55% in November. The inflation rate below market expectations remains quite astounding as they had predicted a rate of 4.