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UPDATE 1-Mexico inflation slows sharply in early Jan, below cenbank ceiling
January 22, 2015 / 2:26 PM / 3 years ago

UPDATE 1-Mexico inflation slows sharply in early Jan, below cenbank ceiling

(Adds detail and background on weak peso)

MEXICO CITY, Jan 22 (Reuters) - Mexican annual inflation slowed sharply to below the central bank’s 4 percent ceiling in the first half of January, even as a weaker peso threatened to push up consumer prices in Latin America’s second biggest economy.

Inflation in the 12 months through mid-January eased to 3.08 percent, data from Mexico’s national statistics office showed on Thursday. The figure was well below the 4.08 percent in the full month of December and the 3.45 percent expected in a Reuters poll.

Mexico’s central bank has said it expects inflation to approach its 3 percent target by midyear, but has said a slump in the peso could add to inflationary pressures.

Mexico’s currency has recovered a bit after hitting its weakest in nearly six years this month, but it has lost more than 12 percent against the U.S. dollar since the start of September.

Consumer prices fell 0.19 percent in early January, compared with expectations of a 0.19 percent rise, as prices for tomatoes eased and long-distance telephone calls dropped due to telecommunications reform, according to the data.

Core prices, which strip out some volatile food and energy costs, were down 0.09 percent in the half-month, below expectations of a 0.18 percent rise. (Reporting by Alexandra Alper; Editing by Simon Gardner and Jeffrey Benkoe)

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