MEXICO CITY (Reuters) - Mexican core price inflation in the first half of February climbed to levels not seen in over 20 years, according to official data published on Thursday, underscoring the challenges the Bank of Mexico faces to tame rising consumer prices.
The closely watched core price index, which strips out some volatile food and energy prices, climbed 0.43% in early February, the national statistics agency INEGI said. That was above expectations in a Reuters poll for a 0.31% increase.
Annual core inflation accelerated to 6.52%, beating expectations for a 6.40% rise. The last time the annual core price index reached that level was in the first half of July 2001.
Headline consumer price inflation rose 0.42% during the first half of February, above expectations for a 0.38% increase, while annual headline inflation jumped to 7.22%, versus a forecast for 7.17%.
The jump in inflation suggests Mexico's "central bank is struggling in its battle to contain price pressures," said Nikhil Sanghani, emerging markets economist at Capital Economics.
Earlier this month, Banxico, as the Bank of Mexico is known, raised its benchmark interest rate for the sixth consecutive time, citing inflation.
Banxico targets inflation of 3% with a one percentage point tolerance range above and below that.
"The recent surge in global commodity prices as a result of the Russia-Ukraine crisis will keep inflation high in the coming months, meaning Banxico's tightening cycle has much further to run," said Sanghani.
Banxico will make its next monetary policy decision on March 24, a week after the U.S. Federal Reserve is expected to raise interest rates after years of sitting near zero.