UPDATE 1-Mexico annual inflation rate rises to 3.70 pct in February

(Adds details about market turmoil, background)

MEXICO CITY, March 9 (Reuters) - Mexican consumer prices rose 3.70 percent in the year through February, the national statistics agency said on Monday, further drifting above the central bank’s target rate at a time when the bank will be coming under pressure to cut rates.

Mexico’s peso has been badly hit by turmoil in global oil markets, losing more than 8% against the dollar since Friday. Analysts were expecting the bank to act and possibly cut rates again to help a stagnant economy further hurt by fears of a slowdown by the coronavirus outbreak.

Inflation increased from 2.83% in the year through January, in part by a rise in the cost of agricultural products.

Consumer prices rose 0.42 percent in February, according to non-seasonally adjusted figures.

The core index, which strips out some volatile food and energy prices, rose 0.36 percent during the month on the back of a rise in merchendise goods and services..

The Bank of Mexico has warned that a minimum wage hike enacted by President Andres Manuel Lopez Obrador’s government could fan inflation and make it difficult to bring consumer prices to the bank’s 3% target in 2020. (Reporting by Drazen Jorgic Editing by Nick Zieminski)