UPDATE 2-Mexico cenbank holds steady with eye on peso, weak growth

jueves 29 de enero de 2015 16:31 GYT

(Adds central bank comments on peso, fiscal policy)

MEXICO CITY Jan 29 (Reuters) - Mexico's central bank on Thursday held interest rates at a record low as policymakers eyed the risk that a sharply weaker peso could fan consumer prices higher while also noting big risks to growth.

The bank kept its main interest rate at 3.00 percent, as expected by 19 of 20 analysts polled by Reuters.

Policymakers said they would carefully watch the impact of a deep peso slump on inflation and said the currency could stay at current levels - close to an almost six year low - for a "prolonged period."

Annual inflation slowed sharply in early January to just above 3 percent after running above the central bank's 4 percent ceiling.

However, Mexico's peso tumbled nearly 12 percent in the fourth quarter. While it has recovered slightly, the sharp drop could push vendors to raise prices this year.

Balancing their concerns about inflation and the peso, central bank board members said there were "big risks" facing the economy. Mexico's economy is expected to have grown just above 2 percent last year.

Policymakers said private consumption had yet to show signs of a clear recovery, noting that a jump in public spending had produced only a "limited" impact on growth.

Mexican central bank governor Agustin Carstens said earlier this month that Mexico will probably have to raise interest rates this year, given the Federal Reserve's own expected hike in U.S. borrowing costs.   Continuación...