August 24, 2017 / 2:10 PM / 3 months ago

Mexican inflation higher than forecast in early August

MEXICO CITY (Reuters) - Mexican annual inflation was higher than expected in the first half of August, official data showed on Thursday, keeping pressure on the central bank to maintain higher borrowing costs.

FILE PHOTO - Sacks of different varieties of corn grain are displayed at a market in Mexico City, Mexico, May 19, 2017. REUTERS/Henry Romero/File Photo

The annual inflation rate reached 6.59 percent in the first two weeks of August, data from the Mexican statistics agency showed. That compared with a forecast by economists polled by Reuters for a rate of 6.49 percent.

In the first half of July the inflation rate was 6.28 percent. The rate averaged 6.44 percent during the month.

The rate in the first two weeks of August was the highest in the first half of any month since June 2001, the data showed.

On a monthly basis, consumer prices rose by 0.31 percent during the first half of August, and the closely watched core price index MXCPIH=ECI, which strips out some volatile food and energy prices, climbed 0.20 percent in early August.

On an annual basis, the core inflation rate reached 5.02 percent, the agency’s data showed.

To tackle rising inflation and weakness in the peso currency, since the end of 2015 Mexico’s central bank has hiked its benchmark interest rate to a more than eight-year high of 7.00 percent. It held rates steady earlier this month, however.

Reporting by Dave Graham; Editing by Meredith Mazzilli

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