By Krista Hughes
MEXICO CITY (Reuters) - Mexico's annual inflation accelerated to a 2-1/2-year high further above the central bank's ceiling in September but analysts expect policymakers to hold their fire and not raise interest rates for now.
Annual inflation rose to 4.77 percent last month, up from 4.57 percent in August but just below the 4.78 percent expected in a Reuters poll, national statistics agency data showed on Tuesday.
It was the highest rate since March 2010 and the fourth month in a row inflation has overshot the central bank's 4 percent tolerance limit amid a spike in fresh food prices.
Analysts think it is unlikely that inflation will dip back below 4 percent by year-end, as the central bank predicts, but Banco de Mexico Governor Agustin Carstens has urged caution as policymakers look for signs of wider price pressures.
In an interview published on Monday, Carstens said it was important not to move benchmark interest rates from the current 4.5 percent level prematurely and noted a recent rise in the peso would limit inflation going forward.
"I think they are going to ride this high inflation for a while and hope that they get some relief from agricultural prices (later)," BNP Paribas economist Nader Nazmi said.
The inflation-wary central bank has held its benchmark rate steady since mid-2009 and lower inflation would give policymakers -- who had a bias towards lower rates at the start of the year -- less reason to tighten monetary policy.
The market is betting on stable interest rates through next year, according to the rate swap futures pricing.. Worldwide, mainstream central bank policy is to raise interest rates to curb inflation but central bankers are also wary of choking economic growth given the uncertain global backdrop.
The latest increase in consumer prices was driven by a 14 percent annual rise in egg prices which added 0.11 percentage points to inflation, following an avian flu outbreak this year in western Mexico. Overall agricultural prices were up 16 percent, the statistics agency said.
Consumer prices rose 0.44 percent in September from August compared with an expected 0.45 percent rate and a 0.30 percent rise in August.
Standard Chartered economist Italo Lombardi said agricultural prices should start to ease soon, noting a correction in international markets, where corn and soybean prices have fallen back in recent weeks.
"We may start to see the peak in agricultural prices; if you look at producer prices and international prices, we could be beginning to see a trend in moderation," he said.
Separate data showed Mexican producer prices rose 4.13 percent last month following a monthly increase of 0.37 percent.
SOME PRICE PRESSURES EASING
Although the rate of increase in core prices eased, Nazmi said this was due to one-off factors such as lower electricity and telephone line prices and was not necessarily a broader signal on domestic price pressures.
"Some of the views that have been expressed in the past about inflation falling to below the central bank's comfort zone by the end of the year appear overly optimistic -- we don't really see price pressure relief that would bring inflation down," he said.
The core price index, which strips out some volatile food and energy prices, rose 0.18 percent compared with an expected 0.20 percent increase and a 0.22 percent rise in August, and annual core inflation eased to 3.61 percent.
Annual inflation in services, a key gauge of home-grown price pressures, fell to its lowest since February and non-food core goods inflation, the most sensitive to currency fluctuations, eased to 3.96 percent, the first deceleration in almost a year.
The peso's gain of about 8.5 percent against the dollar so far this year is one the biggest against the greenback among 152 currencies tracked by Reuters.
The stronger peso -- which has rebounded more than 13 percent against the dollar after hitting a three-year low in early June -- should help limit imported goods prices. Peso moves normally take 4-6 months to feed into the index.
Analysts recently raised their forecasts for inflation this year to 4.15 percent, increasing their estimates in a central bank poll issued last week for the fourth month in a row.
(Editing by Andrea Ricci)