And consumer prices fall for the third consecutive month...

Alas, not in Mexico: it's in the US, where the CPI in 2008 was all of 0.1%. Mexico's inflation, in contrast, was 6.53% last year.

That did not stop Banco de Mexico (Banxico) from cutting the Mexican reference rate 1/2 of a percentage point, from 8.25% to 7.75%, this morning. Banxico hopes/expects (they use that lovely verb, esperar, that has both meanings) that December was the high point for price increases in Mexico. Banxico also points out that the trajectory of the exchange rate can affect that: in other words, if the peso doesn't come back a bit, we'll get more inflation from the depreciation.

And, yes, Virigina, there is still a "pass through" effect. When the peso falls substantially, as it has since October, peso prices rise to compensate partially.