MEXICO CITY (Reuters) – Mexico’s annual inflation rate likely rose during the first half of February as the core index remained flat, a Reuters poll predicted on Friday, boosting bets that the central bank will again opt to significantly lower borrowing costs in March.
The median forecast from 11 analysts estimated that the annual headline rate likely crept up to 3.73% in the first two weeks of the month, compared to the 3.48% rate of rising consumer prices in the second half of January, when prices hit their lowest level in more than four years.
Core inflation, which strips out especially volatile food and energy prices, is forecast at 3.61% in the first half of February, according to the poll, unchanged compared to the previous two-week period.
Earlier this month, Mexico’s central bank lowered its benchmark interest rate by 50 basis points to settle at 9.50%. The monetary authority pointed to cooling inflation and suggested it could cut the key rate by a similar level at future meetings.
The February rate cut came in at double the 25-basis-point reductions the bank has implemented since it began lowering borrowing costs from a high of 11.25% last March.
The bank’s head, Governor Victoria Rodriguez, told Reuters shortly after the latest rate cut that the monetary authority’s fight against inflation had entered “a new phase” and that work to bring prices down was not over.
A separate poll earlier this week from global investment bank Citigroup showed that the overwhelming majority of economists surveyed expect the bank to approve a 50-basis-point cut at his next policy meeting on March 27.
Monthly inflation during the first half of February, meanwhile, likely edged up 0.14% compared to prices in the second half of January, according to the Reuters poll, while the monthly core rate was seen up 0.24%.
Mexico’s official statistics institute INEGI is scheduled to release consumer price data for the first two weeks of February on Monday.
(Reporting by Noe Torres; Editing by Alistair Bell)
