UPDATE 3-Mexico annual inflation rate eases in early February
MEXICO CITY Feb 24 (Reuters) - Mexican annual inflation cooled in early February off an 8-month high, bolstering bets the central bank will leave interest rates on hold throughout the year.
Inflation for the 12 months through the first half of February eased to 4.21 percent, below forecasts for a 4.32 percent rate.
The figure was also below the 4.63 percent rate reached in the first half of January and the 4.48 percent pace for the full month.
The figure marked the second month in a row that inflation has strayed above the Central Bank's 4 percent ceiling, as public transportation costs have been raised and after a fiscal reform that boosted taxes on junk food and sodas.
"The balance of risks for inflation has deteriorated," Banco de Mexico deputy governor Manuel Sanchez said in a speech in Arizona delivered on Monday.
Sanchez said financial volatility could put pressure on the exchange rate which could fan inflation, and added that a recent rise in short-term inflation expectations needed to be watched.
Central Bank Governor Agustin Carstens said earlier this month that inflation had likely peaked in the first half of January, but that policymakers would act if they saw that a recent jump in consumer prices was spurring wider price pressures.
The central bank predicts annual inflation will remain above 4 percent in the first months of 2014 before falling below that level in the second half of the year. Continuación...