Mexico City, Feb 21 (Reuters) - Analysts in a Reuters poll forecasted an increase in Mexico's annual inflation rate for the first half of February, with expectations that the core index would remain stable. This development is seen as increasing the likelihood of another substantial reduction in borrowing costs by the central bank in March.
Based on a median forecast from 11 analysts, the anticipated annual headline rate is projected to have risen to 3.73% in the first half of the month from the 3.48% recorded in the latter half of January – the period marking the lowest consumer price increase in over four years.
The poll also indicates that core inflation, excluding volatile food and energy prices, is expected to hold steady at 3.61% during the first two weeks of February, in line with the previous two-week period.
Earlier in the month, Mexico's central bank decreased its benchmark interest rate by 50 basis points to reach 9.50%. Citing easing inflation, the bank hinted at potential similar rate cuts in the future.
Compared to the previous rate reduction trend of 25 basis points, the 50-basis-point cut in February was considered aggressive, reflecting Governor Victoria Rodriguez's statement that the fight against inflation had embarked on a "new phase".
Predictions from a Citigroup poll this week indicate a strong expectation among economists for a 50-basis-point cut at the next policy meeting scheduled for March 27.
According to the Reuters poll, monthly inflation in the first half of February is anticipated to have increased by 0.14% compared to the second half of January, with the core rate expected to rise by 0.24%.
Official consumer price data for the initial two weeks of February is slated for release on Monday by Mexico's national statistics institute, INEGI.