(Reuters) - Mexico's headline inflation rate eased slightly more than expected in February, official data showed on Thursday, +-reinforcing bets that the country's central bank could kick off a monetary easing cycle when its board meets later this month.
Consumer prices in Latin America's second-largest economy rose 4.40% in the year through February, national statistics agency INEGI said, down from 4.88% in January and a tad below the 4.42% expected by economists polled by Reuters.
As inflation maintains its downward trend, a survey released by local lender Citibanamex last month showed that most economists expect policymakers at the Bank of Mexico to start lowering interest rates at their next meeting on March 21.
The headline index is still above the central bank's target range of 3%, plus or minus one percentage point, but the monetary authority last month hinted that a rate cut could be on the table in upcoming meetings.
The central bank, also known as Banxico, began a rate hiking cycle in June 2021 to tame high inflation and has held the key rate at its current record-high level of 11.25% since March 2023.
The latest consumer price figures, Capital Economics' deputy chief emerging markets economist Jason Tuvey said, "leave the path open for Banxico to cut interest rates by 25 basis points later this month."
"But the continued strength of services inflation means that the easing cycle will be more gradual than most currently anticipate."
Mexico's consumer prices rose 0.09% in February, according to non-seasonally adjusted figures released by INEGI. The core index, which strips out some volatile food and energy prices, rose 0.49% during the month.
Annual core inflation hit 4.64%, down from 4.76% in the previous month. Economists were expecting it to come in at 4.62%.