MEXICO CITY (Reuters) – A stubborn surge of inflation has led central banks worldwide to adapt monetary policy to protect people and businesses from price increases, with many raising interest rates in step with the U.S. Federal Reserve.

However, the central banks of major Latin American economies have been holding their rates even as those in the U.S. and Europe have signaled further hikes. Analysts believe the region could lead the way in a new period of rate cuts.

Here are the latest policy decisions from Latin America’s top economies:

BIGGEST MARKETS

* Brazil’s central bank held in June its Selic benchmark interest rate at 13.75% for the seventh consecutive policy meeting, but softened its tone about future steps. The institution paused its aggressive tightening cycle in September following 12 straight rate hikes.

Consumer prices in Latin America’s largest economy fell to more than a two-year low in May, at 3.94%. The bank’s target is 3.25% in 2023, plus or minus 1.5 percentage points.

* Mexico’s central bank kept its benchmark interest rate at 11.25% in June and said it will be necessary to keep it at that level for a long time. Its rate is 725 bps higher than when it began hiking in June 2021.

Annual headline inflation in the region’s second-largest economy slowed in May to its lowest point since August 2021, to 5.84%. The figure was lower than that of forecasts and represented a step forward in the central bank’s expectations to bring inflation down to 3%, plus or minus one percentage point.

SOUTH AMERICA

* Argentina is battling one of the highest inflation rates in the world, with annual price rises surpassing 110%. Price hikes, currency weakness and indebtedness have hit the economy and left locals struggling to keep up with daily expenses, including food.

The central bank held its benchmark interest rate at 97% in June, after a 600 base-point hike in May.

* Chile’s central bank decided at its latest meeting to keep its benchmark rate at 11.25%, pointing to cuts in the short-term. It had maintained the same level since October when it paused a series of hikes that added up to 1,075 bps since July 2021.

The Andean nation saw annual inflation decline in May to 8.7%, still well ahead of expectations to close the year at 4.6%.

* Peru’s central bank held its benchmark interest rate at 7.75% in June, unchanged since a 25-bps hike in January. Battling the highest inflation in a quarter of a century, policymakers in the copper-producing nation had raised rates periodically from mid-2021, when the rate stood at just 0.5%.

Annualized inflation stood at 7.89% in May, dipping for the fourth consecutive month, but still far from the institution’s 1% to 3% target range.

* Colombia’s central bank raised its benchmark interest rate by 25 basis points to 13.25% at its latest meeting in April, during a split vote that brought its tightening cycle up 1,150 bps since September 2021.

The country posted annualized inflation of 12.36% in May. That was its lowest level since October 2022, but still more than four times the bank’s 3% long-term target.

The bank’s next monetary policy meeting is on June 30.

(Compiled by Aida Pelaez-Fernandez; Editing by Rosalba O’Brien)

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