March 22, 2018 / 2:44 PM / a year ago

Mexico annual inflation rate falls to over 1-year low

Prices of vegetables are displayed at a store in Mexico City, Mexico, February 22, 2018. REUTERS/Edgard Garrido

MEXICO CITY (Reuters) - Mexican consumer prices rose more than expected in early March, but the pace of consumer price gains fell to its lowest level in just over a year, official data showed on Thursday.

Inflation in the 12 months through the first half of March MXCPHI=ECI slowed to 5.17 percent, the national statistics agency said, down from 5.45 percent in early February but above a 5.13 percent rate projected in a Reuters poll.

The rate in early March was the lowest since February 2017.

Mexico’s central bank hiked its key interest rate to a nine-year high of 7.50 percent in February and the median of a poll this week by Banamex projected policymakers would hike again in June.

Earlier this month, Central Bank Governor Alejandro Diaz de Leon told Reuters that policymakers did not expect significant shocks to inflation in the short term.

Data showed the annual core rate MXCPIC=ECI, which strips out some volatile food and energy prices, was down to 4.15 percent for the first half of March from 4.32 percent in early February, in line with expectations.

Month-on-month, consumer prices rose 0.29 percent during the first half of March MXCPIF=ECI, above a forecast 0.24 percent rate, while the core price index MXCPIH=ECI climbed 0.24 percent, in line with expectations.

Reporting by Michael O'Boyle; Editing by Jonathan Oatis

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