April 24, 2017 / 1:40 PM / a year ago

UPDATE 1-Mexico inflation rises to nearly 8-year high in early April

 (Recasts with annual inflation rate)
    MEXICO CITY, April 24 (Reuters) - Mexican annual inflation
rose more than expected in early April to hit its fastest pace
in nearly 8 years, which could bode for further interest rate
hikes from the central bank.
    Inflation for the year through mid-April was 5.62 percent
            , the national statistics institute said on Monday. 
    The figure was the highest since June 2009, and above
expectations of economists polled by Reuters for 5.58 percent.
    Mexico's central bank governor Agustin Carstens last week
signaled on that the bank's cycle of monetary tightening might
not be over.             
    The Banco de Mexico has raised the benchmark interest rate
to 6.50 percent, its highest since 2009, with a string of
50-basis point hikes followed by a smaller increase, 25 points,
in its last board meeting in late March.             
    The core price index             , which strips out some
volatile food and energy prices, rose 4.76 percent in the
12-month period to mid-April, above the 4.61 percent forecast in
a Reuters poll. The rate is at its highest since August 2009.
    A deep slump in the peso last year has pressured inflation,
but a recent rally in the currency could help contain pressures.
    In the first half of April, consumer prices fell 0.15
percent              as summer electricity subsidies kicked in,
while the core price index              climbed 0.26 percent.
    A separate report from the statistics institute showed the
pace of economic growth in February slipped to its slowest since
last August.             

 (Reporting by Michael O'Boyle; Editing by Meredith Mazzilli)
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