* Banco de Mexico rates seen unchanged at 4.5 pct
* Central bank likely to say inflation risks have eased
* Decision due Friday 0900 local (1500 GMT
MEXICO CITY, Jan 18 Mexico's central bank is
likely to hold borrowing costs steady on Friday after inflation
cooled in December back into policymakers' comfort zone, giving
them room to pull back from a threat to hike interest rates.
The Banco de Mexico will leave its benchmark interest rate
steady on Friday at 4.50 percent, according to all
20 analysts polled last week by Reuters.
Easing inflation pressures and solid, if slowing, growth
bode well for further stability in Mexican borrowing costs.
Mexico's main rate has held steady since mid-2009.
After inflation fell in December for the third month in a
row and dropped below the central bank's 4-percent limit,
policymakers could remove a pledge to raise interest rates if
inflation begins to rise again.
"We think that the bank will throw 'out the window' the rate
hike threat it presented in October and November, choosing
instead to adopt a far more neutral statement," Credit Suisse
economist Alonso Cervera wrote in a note.
Data last week showed the annual pace of Mexican consumer
price increases dipped to 3.57 percent in December. The rate has
fallen back after hitting a 2-1/2 year high in September, driven
by a spike in food costs that has now faded.
Yields on Mexican interest rate swaps have fallen
in recent weeks and are not forecasting a hike over the next two
The recent exit of deputy governor Jose Julian Sidaoui, who
was considered one of the board members most concerned about
inflation, could also contribute to a statement that expresses
less worry about consumer price increases.
Friday's decision will be written by four members as
Congress still needs to approve economist Javier Guzman, who was
nominated last month by President Enrique Pena Nieto in his
first month in office.
Inflation expectations have remained largely stable. A poll
from Banamex last week showed the median of economists expect
the annual rate will end 2013 at 3.79 percent, up 4 basis points
from a poll in December.
A stronger Mexican currency could help curb the price of
imports and help further tame inflation. The peso
hit a 10-month high on Thursday.
Solid U.S. demand has helped shield Mexico from more
sluggish growth around the world. Still, Latin America's
second-biggest economy is seen slowing from an expected 3.9
percent in 2012 to 3.5 percent this year, according to the