Mexico’s inflation decelerated in line with expectations last month but remained elevated when volatile items were not considered, underscoring the central bank’s view that it would be premature to consider easing monetary policy at this week’s meeting.

Consumer prices increased 4.79% in July from the same month a year earlier, down from 5.06% in June, the national statistics institute reported Wednesday. The result matched the median estimate of economists surveyed by Bloomberg.

Core inflation, which excludes volatile items such as fuel and food, slowed to 6.64% from 6.89% a month prior. It’s remained more persistently elevated in comparison to headline inflation and still more than twice the bank’s target of 3%, plus or minus 1 percentage point.

Food prices including those of avocado, onion and bananas contributed most to inflation, together with costs of air transport, housing, and tourist services, keeping pressure on policymakers to remain vigilant.

“On the whole the data is good,” said Jessica Roldan, chief economist at Casa de Bolsa Finamex. “But it does not take away the concern that we have expressed about the resistance of core inflation to slow more quickly.”

Banco de Mexico’s five board members haven’t discussed yet a timeline for reducing interest rates, according to the minutes of their June meeting, when they said it was too early to have such a conversation. That has led to a wide range of projections about when the bank, known as Banxico, will finally opt for a less restrictive stance.

“It’s a seasonal matter, but once the vacations are over we’ll see the opposite effect: services prices will start to go down, but there will be other factors,” said Janneth Quiroz Zamora, director of economic analysis at Monex Casa de Bolsa. “School prices will go up in September and in October, energy subsidies will begin to end.”

Among the region’s big inflation-targeting central banks, Chile and Brazil have already started to lower borrowing costs, while economists surveyed by Bloomberg expect Peru to begin easing monetary policy in the third quarter with Colombia and Mexico on board by year-end.

Read More: Cautious Banxico Members Say It’s Too Early to Talk Rate Cuts

Analysts in a Citi survey published this week said that they expected inflation to slow to 4.68% by the end of 2023 and to 4% by the end of 2024, with Banxico expected to cut rates by 25 basis points in December. Some analysts, including those at Bank of America, predicted the board could wait until June 2024 to begin lowering rates.

--With assistance from Rafael Gayol.

(Update with specifics of inflation in fourth paragraph and economist comments starting in fifth paragraph.)