MEXICO CITY (Reuters) – Mexican consumer prices rose 4.67% in the year through March due to an increase in fuel prices, in line with analyst expectations and above the central bank’s target range, data from the national statistics agency showed on Thursday.
The new figure brings the rise in consumer prices to its highest level since the 4.83% registered in December 2018 and is firmly above the Bank of Mexico’s target inflation rate of 3%, with a one percentage point tolerance threshold above and below that level.
“The jump in Mexico’s headline inflation … was driven once again by higher fuel inflation. We think this trend has a bit further to run, but the central bank is likely to look through this and keep its policy rate at 4.00% over the coming months,” said Nikhil Sanghani, Latin America economist at Capital Economics.
Banxico, as the bank is known, kept its key interest rate unchanged at 4.0% as expected at its last monetary policy meeting on March 25, boosting the peso currency, and said inflation in the coming months will now likely be slightly higher than previously forecast.
Sanghani said base effects will likely continue to push up fuel inflation in April.
Consumer prices rose 0.83% in March, according to non-seasonally adjusted figures.
The core index, which strips out some volatile food and energy prices, rose 0.54% during the month. The annual core inflation rate ticked up to 4.12% in March.
(Reporting by Anthony Esposito; Editing by Steve Orlofsky)