(Corrects to show at record low for 3rd month in a row, not 2nd, in headline and paragraphs 1 and 3)
MEXICO CITY, Aug 7 (Reuters) - Mexico’s annual inflation rate cooled in July, posting a record low for a third month in a row, official data showed on Friday, pointing to little pressure on prices from a sharp slump in the peso this year.
The national statistics institute said inflation in the 12 months through July eased to 2.74 percent from 2.87 percent in June. A poll of analysts by Reuters had forecast a rate of 2.75 percent.
The annual rate was the lowest on record, according to central bank data going back to 1970, holding below the central bank’s 3 percent target for a third month.
Inflation is expected to remain below 3 percent for the rest of the year, but the central bank is still expected to raise interest rates when U.S. borrowing costs move higher, even though Mexican economic growth is sluggish.
Policymakers are more concerned a deeper slump in the peso , which has lost more than 20 percent against the dollar since last year, could hit inflation expectations.
Last week, Mexico boosted its dollar auctions to defend the currency and the central bank warned it could raise interest rates at any time, even before the Fed if the peso needs the support.
The Mexican data showed that consumer prices rose by 0.15 in July, just below expectations. The core price index, which strips out volatile food and energy prices, climbed 0.17 percent, in line with the poll.
The 12-month core inflation rate came in at 2.31 percent, also in line with forecasts.
Reporting by Michael O'Boyle; Editing by Bernadette Baum