Mexico inflation eases less than expected in early July

Mexico’s annual inflation rate eased less than expected in the first half of July, data showed on Monday, but still lent weight to the central bank’s view that price pressures in Latin America’s second biggest economy may be peaking.

Annual inflation slowed to 6.28 percent from 6.33 percent in the second half of June, figures from the national statistics institute INEGI showed. A Reuters poll of economists had forecast a rate of 6.23 percent.

Consumer prices rose 0.24 percent during the first half of July compared with the previous two-week period, slightly above the poll forecast for an increase of 0.19 percent.

Mexican Central Bank Governor Agustin Carstens said on July 14 that Mexico was not far from reaching a peak in inflation after the annual rate accelerated to its fastest pace in 8-1/2 years during the month of June.

The closely watched core price index MXCPIH=ECI, which strips out some volatile food and energy prices, climbed 0.19 percent in early July compared with the previous half month and by 4.92 percent compared with the same period a year earlier.

Mexico’s central bank has hiked interest rates in its last seven meetings. Carstens told Reuters a pause was likely at its next policy meeting in August but that it was premature to talk about rate cuts in the first six to nine months of 2018.

Reporting by David Alire Garcia; Editing by Dave Graham and W Simon

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