Mexico's annual inflation rate quickened more than expected in March to just above the central bank's 3 percent target, as a deep slump in the peso threatens to fan consumer prices higher. Inflation in the 12 months through March reached 3.14 percent, above the 3.04 percent expected in a Reuters poll, and up from a nearly nine-year low of 3.00 percent annual rate in February.
Mexico's annual inflation rate had previously eased after hitting a nine-month high in October, and the central bank has said it expects inflation to end the year below 3 percent amid slack domestic demand.
Banco de Mexico left interest rates on hold at a record low of 3 percent in March, as policymakers eyed greater risks to growth and flagged concerns that a US Federal Reserve move could hit the sinking peso.
Mexico's peso hit record lows last month, dragged down by plunging oil prices and concerns over the Fed's eventual rate hike, which could prompt investors to dump riskier emerging market assets.
Central bank governor Carstens said on Wednesday that the bank could act if peso weakness hits inflation expectations.