UPDATE 1-Mexico annual inflation ticks up in May, still below cenbank target

jueves 9 de junio de 2016 09:48 GYT

(Recasts with annual rate, adds background)
    MEXICO CITY, June 9 (Reuters) - Mexico's annual inflation
picked up in May but remained below the central bank's 3 percent
target, giving policymakers room to keep interest rates on hold
amid concerns about a weak currency.
    Inflation in the 12 months through May rose to 2.60 percent,
the national statistics agency said on Thursday. That compared
with a forecast of 2.58 percent in a Reuters poll and April's
2.54 percent annual rate.
    After falling to a record low in May 2015, inflation in
Latin America's No. 2 economy is posting the longest period on
record below the central bank's 3 percent target.
    Still, Mexican policymakers unexpectedly raised interest
rates in February to support the peso, which has tumbled since
late 2014 to record lows during a slump in world oil prices and
worries about global growth.
    Last month, central bank Governor Agustin Carstens suggested
policymakers would be reluctant to make another unexpected move
even after the peso fell by the most in May in four years. 
    Taking pressure off the central bank, the peso has
bounced back in June, after weak jobs data in the United States
dampened expectations that the U.S. Federal Reserve will raise
borrowing costs this month.
    The new data showed consumer prices fell 0.45
percent in May, in line with estimates in the Reuters poll and
the second consecutive monthly drop, on summer electricity cost
subsidies and lower tomato prices.
    The core index, which strips out some volatile food and
energy prices, rose 0.21 percent during the month,
just below the 0.22 percent estimate seen in the poll.
    The 12-month core inflation rate rose to 2.93 percent
, its highest since December 2014, from 2.83 percent
in April. The figure was in line with forecasts.

 (Reporting by Michael O'Boyle; Editing by Lisa Von Ahn)