MEXICO CITY –  Mexico’s headline inflation likely ticked up in the first half of May for the third consecutive fortnight, a Reuters poll showed on Monday, fueling bets the Bank of Mexico will hold its key interest rate steady at its next monetary policy meeting.

The median forecast of 10 analysts projects annual headline inflation (MXCPHI=ECI), opens new tab of 4.79% for the first half of May, slightly up from 4.67% in the second half of April. “We believe that the price of some agricultural products may continue to put pressure,” said Humberto Calzada, chief economist at the Rankia Latin America firm, citing adverse climate conditions.

Meanwhile, the closely watched core index (MXCPIC=ECI), opens new tab, seen as a more useful measure of consumer price trends because it strips out some volatile energy and food prices, is seen at 4.31% in annual terms, its lowest level since May 2021. Mexico’s central bank held its benchmark interest rate steady at 11.0% earlier in May, in a unanimous decision, as inflation remained above its target range.

Bank of Mexico governor Victoria Rodriguez said last week the bank’s five-member board will discuss the possibility of resuming interest rate cuts at the upcoming June 27 monetary policy meeting. Nonetheless, deputy governor Irene Espinosa said days later she did not expect a rate cut at the next meeting. Compared with the previous two weeks, analysts estimated that monthly headline inflation fell 0.22%, while monthly core inflation rose 0.15%. (MXCPIF=ECI), opens new tab, (MXCPIH=ECI), opens new tab. Mexico’s national statistics agency will publish official inflation data for the first half of May on Thursday. (Reuters)…[+]