Mexican consumer prices rose more than analysts forecast in March, pushing annual inflation above the target range for the first month since November and bolstering analysts’ calls for interest rates to remain on hold.
Prices climbed 0.73 percent, the national statistics agency said today, lifting annual inflation to 4.25 percent from 3.55 percent in February. Analysts had expected prices to rise 0.69 percent, according to the median of 17 estimates in a Bloomberg survey. Core prices, which exclude energy and agriculture costs, rose 0.30 percent, compared with the 0.35 percent forecast by 16 economists surveyed by Bloomberg.
The central bank cut its benchmark rate by half a point to a record-low 4 percent on March 8, with policy makers forecasting that inflation would slow toward 3 percent after rising temporarily. It was the first rate cut in four years and came as inflation breached the 2 percent to 4 percent target range in early March as a frost drove up farm prices.
“Certainly, we’ve had some transitory shocks that we see diminishing soon,” Carstens said April 5. “The internal and external environment allows us to presume that we’re going to converge on 3 percent, the inflation target, and we can do it with a lower rate.”
Yields on fixed-rate government bonds due December 2013 rose two basis points to 4.04 percent at 8:18 a.m. in Mexico City. Inflation-linked bond yields maturing in 2013 fell 2 basis points to 1.23 percent. The peso strengthened 0.6 percent to 12.1241 per U.S. dollar and has appreciated 5.4 percent this year, the most of 16 major currencies tracked by Bloomberg.
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