Mexico annual inflation rises more than expected ahead of rate meeting
Reuters
Published Aug 09, 2017 09:56AM ET
Mexico annual inflation rises more than expected ahead of rate meeting
MEXICO CITY (Reuters) - Mexico's annual inflation rate reached its fastest pace in more than 8-1/2 years in July, rising more than analysts expected and likely making it harder for the central bank to start loosening monetary policy soon.
Mexican consumer prices rose 6.44 percent in the year through July <MXCPIA=ECI>, the national statistics agency INEGI said on Wednesday, above the 6.37 percent rate forecast in a Reuters poll.
It was the highest reading since December 2008.
Mexico's central bank will release its next monetary policy decision on Thursday, with all analysts polled by Reuters expecting rates to remain steady at 7.00 percent.
The central bank has hiked interest rates in its previous seven meetings, taking the rate to a more than eight-year high.
In an interview with Reuters last month, Banco de Mexico Governor Agustin Carstens said it was likely the bank would pause its cycle of rate hikes in August.
A recovery in the Mexican peso this year has dampened concerns that currency weakness could fan inflation even higher.
Mexico's peso has rallied from a record low reached in January as U.S. President Donald Trump backed away from threats to impose big tariffs on imports from Mexico and moved toward a renegotiation of the North American Free Trade Agreement.
The annual core rate <MXCCPI=ECI>, which strips out some volatile food and energy prices, rose to 4.94 percent, in line with the poll.
Consumer prices <MXINFL=ECI> rose 0.38 percent in July, according to non-seasonally adjusted figures, while the core index rose 0.27 percent during the month <MXCPIX=ECI>.
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Written By: Reuters
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