Divided survey shows Mexico central bank likely to hold interest rate at 11%: Reuters poll

MEXICO CITY (Reuters) - The Bank of Mexico will likely hold its benchmark interest rate at 11% later this week, according to a majority of analysts in a Reuters poll on Tuesday, as inflation and the recent weakness of the local currency muddle expectations for the key lending rate.

Holding the benchmark rate was backed by 12 of 22 analysts polled, while the 10 others forecast a 25 basis point cut.

In late June, the central bank's board voted to keep the rate at 11% after cutting it in March for the first time since launching its monetary tightening cycle in 2021. But the bank has signaled that a slowing inflation rate could pave the way for future cuts.

Since then, Mexico's consumer price index has shown upward pressure on inflation. Prices monitored by the index shot up during the first half of July to their highest rate in nearly a year, even as core inflation has slowed and currently hovers close to the central bank's target of 3%, plus or minus one percentage point.

This week, Mexico's peso currency weakened to its lowest level in more than two years versus the U.S. dollar, due largely to volatility in global markets, a development seen by most analysts supporting a potential decision to leave the benchmark rate unchanged.

The central bank will publish its monetary policy statement on Thursday at 1:00 p.m. local time (1900 GMT), shortly after official data on July's full-month inflation rate is set to be released.

Poll data:

(Reporting by Noe Torres; Additional reporting by Gabriel Burin; Editing by Aurora Ellis)