MEXICO CITY, March 11 (Reuters) - Mexico's Central Bank Governor Agustin Carstens said on Tuesday he expects inflation to head back toward the bank's 3 percent target, and will remain vigilant about any price contagion.
Annual inflation in Mexico in February retreated from an eight-month high in the previous month as the effect of new taxes from a fiscal reform eased, underpinning chances the central bank will keep interest rates on hold this year.
"We cannot declare ourselves completely satisfied with what has been achieved," Carstens said. "We still have to consolidate, in a stable and lasting manner, the permanent goal of annual inflation of 3 percent with a variation gap of 1 percent."
"We are going in the right direction."
Inflation in the 12 months through February was 4.23 percent, the national statistics agency said on Friday, down from January's 4.48 percent pace but just above the 4.2 percent forecast in a Reuters poll.