ABSTRACT
On 1 April 1994 Congress granted full autonomy to the Banco de México, with the mandate of procuring price stability. Autonomy gives the Banco de México control over all its credit operations in the widest sense. Thus, the last years have witnessed substantial progress towards the abatement of inflation. Nevertheless, the Mexican experience has clearly shown that there are other factors beyond the direct influence of monetary policy that affect the behaviour of prices. Among these factors are capital flows, movements in the exchange rate, wage negotiations, changes in public or controlled prices, and shocks to aggregate demand and supply.
