UPDATE 2-Mexico retail sales rebound in June after May dip
* Retail sales up 1.8 pct in June, m/m, vs poll of 0.9 pct
* Sales rise 5.6 pct in June, y/y, vs poll of 4.13 pct
* Rising consumer confidence bodes for solid sales ahead
MEXICO CITY, Aug 22 (Reuters) - Mexican retail sales rebounded in June, underscoring the health of domestic demand and pointing to steady central bank interest rates in the coming months.
Sales rose 1.8 percent in June from May compared to estimates in a Reuters poll of a 0.9 percent increase. A drop in May was upwardly revised to a 0.13 percent dip, the national statistics office said on Wednesday.
Weaker U.S. demand has dented exports from Latin America's second-largest economy, but domestic demand and the country's services sector expanded strongly in the second quarter.
According to previously released data, Mexican consumer confidence jumped to its highest in four years in July after voters elected a new government which has promised to boost economic growth, and that optimism should support retail sales.
"We believe that sales will continue to expand at the beginning of the third quarter," Barclays analyst Marco Oviedo wrote in a note to clients.
Mexico's central bank is expected to hold its benchmark interest rate steady in the coming months at 4.5 percent as the risks of slowing global growth offset a rise in annual inflation to a more than two-year high in July due to a surge in food prices.
Robust domestic demand eases pressures on policymakers to cut interest rates to spur economic growth.
Compared with June 2011, sales were up by 5.6 percent, beating expectations for a rise of 4.13 percent.
Still, private sector data suggest the annual pace of retail sales growth cooled in July. Same-store sales for Mexican supermarkets, department and specialty stores rose, on average, 3.6 percent in July from a year ago, versus a 7.9 percent expansion in June.
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