Mexico inflation eased in August after months of acceleration: Reuters By Reuters poll

MEXICO CITY (Reuters) – Mexico’s headline inflation rate likely eased in August after accelerating over the past five months, a Reuters poll of analysts showed on Friday, fueling expectations that the Bank of Mexico will cut its benchmark interest rate later this month. Monday.

The median estimate from eight analysts forecast a year-on-year inflation rate in August of 5.08 percent, down from July’s 5.57 percent but still far from the central bank’s target of 3.00 percent, plus or minus one percentage point.

The closely watched core inflation index, which excludes highly volatile products to better gauge price trends, is seen declining for the 19th straight month at 4.02%.

In August alone, consumer prices were estimated to have risen 0.09 percent from the previous month, with core prices rising 0.24 percent, according to the Reuters poll.

Year-on-year inflation in Latin America’s second-largest economy rose in recent months to a one-year high in July, even as core inflation eased, complicating the central bank’s effort to reduce borrowing costs.

The bank’s board cut the benchmark interest rate by 25 basis points in early August in a split vote, with two of the bank’s five governors expressing concern that the premature rate cut could damage the bank’s credibility.

The Bank of Mexico’s next monetary policy decision will be announced on September 26.