MEXICO CITY (Reuters – Mexico’s inflation accelerated more quickly than predicted in February. With underlying price pressures at their highest levels in nearly two decades, officials revealed that this fueled expectations that Mexico’s central bank would raise its interest rate.

The national statistics bureau INEGI released Wednesday’s figures showing that consumer prices inflation increased to 7.28%, from 7.07% January. That is more than twice what the Bank of Mexico had expected. In a Reuters poll, a February reading was predicted at 7.23%.

Core inflation (which strips out volatile items) accelerated almost by a fourth tenth of a point to 6.59%. It is now the highest rate in over ten years.

Jonathan Heath (Banxico), a member of the Bank of Mexico’s Board, said that core inflation has not likely peaked in February. In March, he predicted that it will be higher than 6.7%. Heath also warned about rising prices from the Ukraine-Russian conflict.

He stated that “high inflation” will continue to be more prevalent than expected, in Mexico as well as globally.

Banxico’s inflation target is 3% with a tolerance of one point above and below. Bank raised benchmark interest rates by 50 basis point in February. It was the sixth consecutive increase, raising inflation concerns.

However, Mexico’s economy remains stagnant in the fourth quarter. Heath said last week that increased borrowing costs wouldn’t make it easier to recover.

Nikhil Sanghani, Capital Economics economist, stated that Mexico has increased fuel subsidies in an effort to reduce the impact of rising energy prices. However higher food and commodity costs will likely increase headline inflation to 7.5% over the next few months.

Sanghani stated in a research paper that “there is a growing possibility that Banxico will accelerate the pace of tightening during its meeting later in this month.”

The INEGI data revealed that Mexican consumer prices rose by 0.83% in February compared to the preceding month. Core index saw an increase of 0.76% in the same period.