Mexico inflation rises at fastest pace in nearly eight years
FILE PHOTO: A general view of a market in Mexico City, Mexico, January 11, 2017. REUTERS/Tomas Bravo
MEXICO CITY (Reuters) - Mexican annual inflation rose at its fastest pace in nearly 8 years in early March, prompting central bank chief Agustin Carstens to hint at higher interest rates to combat an inflation "bubble" he said would subside later in the year.
The headline inflation rate for the year through mid-March was 5.29 percent
Mexico's central bank raised its benchmark interest rate last month to a nearly eight-year high after a steep hike in gasoline prices and weakness in the peso sparked by Donald Trump's election as U.S. president.
Just after the data was published, Carstens said the central bank had room to continue adjusting rates.
The peso has recovered as U.S. officials have taken a more conciliatory tone toward Mexico and the U.S. Federal Reserve said it would stick to gradual interest-rate increases.
Still, many analysts expect the central bank to lift rates again on March 30 following the Fed as inflation climbs.
The core price index
The figure was above the 4.29 percent forecast in a Reuters poll.
In the first half of March, consumer prices rose 0.35 percent
(Reporting By Alexandra Alper and Miguel Angel Gutierrez; Editing by Bernadette Baum)
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