Mexican inflation seen at lowest level in more than two years-Reuters poll

MEXICO CITY (Reuters) – Mexico’s headline inflation likely reached its lowest level in more than two years during the first half of June, but remained above the central bank’s target, a Reuters poll showed on Monday, reinforcing bets the bank will keep the key rate steady longer.

The median forecast of 11 analysts sees annual headline inflation at 5.30%, its lowest level since the second half of March 2021, although it would still be significantly higher than the official target of 3%, plus or minus a percentage point.

In its most recent monetary policy announcement, the Bank of Mexico kept its benchmark interest rate unchanged at 11.25%, ending a nearly two-year rate-hike cycle, and vowed to keep it at that level for an extended period of time for inflation to converge to the target.

The core index, which strips out volatile food and energy prices, is forecast to have slid to 7.02% year-on-year, its lowest level since March 2022.

In the first half of June, consumer prices were forecast to have risen 0.15% compared to the previous two-week period, while the core measure likely grew 0.22%.

Mexico’s statistics institute will release inflation data for the first half of June on Thursday.

(Reporting by Noe Torres; Additional reporting by Gabriel Burin in Buenos Aires; Editing by Sandra Maler)