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UPDATE 1-Mexico annual inflation rises to fastest rate since June
March 9, 2016 / 2:45 PM / 2 years ago

UPDATE 1-Mexico annual inflation rises to fastest rate since June

(Recasts with comparison, adds background)
    MEXICO CITY, March 9 (Reuters) - Mexico's annual inflation
rate in February rose to its fastest since June on a surge in
food costs while core inflation showed only modest pressure from
a deep slump in the peso, data showed on Wednesday.
    Inflation in the 12 months through February 
rose 2.87 percent, the national statistics agency said. That
compared with a forecast of 2.94 percent in a Reuters poll and
2.61 percent rise in January.
    Before beginning to rise in January, Mexico's annual
inflation rate posted record lows every month since last May,
the longest period ever in which price gains stayed below the
central bank's 3 percent target.
    However, policymakers in Latin America's No. 2 economy
raised interest rates in December following a move by the U.S.
Federal Reserve and surprised the market with another hike last
month in a bid to support the battered peso.
    Consumer prices rose 0.44 percent in February
compared with the prior month, below estimates of a 0.50 percent
increase, driven mostly by higher egg and onion costs. 
    The core index, which strips out some volatile
food and energy prices, rose 0.36 percent from January compared
with  0.35 percent seen in the poll.
    The 12-month core inflation rate rose 2.66
percent compared to a forecast  2.67 percent and a 2.64 percent
rate in January, reflecting only modest pressure from higher
import prices due to a weakening peso.
    After the central bank on Feb. 17 raised interest rates and
began intervening in the foreign exchange market, the peso has
recovered some ground from an all-time low, but the currency is
still down more 3 percent this year against the dollar. 

 (Reporting by Michael O'Boyle Editing by W Simon)

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