MEXICO CITY: Mexico’s annual inflation rate quickened in August to its highest level since February, but remained below the central bank’s target despite a slide in the country’s currency.
Inflation in the 12 months through August rose 2.73 percent, below expectations for a rise of 2.78 percent in a Reuters poll but above the 2.65 percent rate in July, the national statistics agency said on Thursday. Mexico’s central bank targets inflation of 3 percent. Despite relatively tame inflation and weak economic growth, a steep fall in the peso prompted policymakers to raise interest rates by more than expected in late June.
The Mexican currency has weakened more than 6 percent so far this year against the dollar, stirring concern that this could feed inflation by raising the cost of imports priced in pesos. The biggest drivers of inflation were higher gasoline costs and university fees, the agency said.
The core price index, which strips out some volatile food and energy prices, rose at an annual rate of 2.96 percent, easing from the 2.97 percent rate in the prior month but above expectations for a 2.93 percent increase. Month-on-month, consumer prices rose 0.28 percent in August, below expectations, while the core index, rose 0.19 percent, in line with the poll.
