POLL--Mexican inflation likely flat in December, as core index seen easing

Jan 6 (Reuters) - Mexican headline inflation likely held steady in December, while core inflation likely fell but remained above the official target, a Reuters poll showed on Tuesday, strengthening the view that the Bank of Mexico may pause its interest rate-cutting cycle.

The median forecast from 19 analysts projected that headline prices increased by an estimated 0.40% compared with November, while the annual rate for the month was expected to be the same as November's at 3.80%.

Core inflation, which is considered a more accurate measure of price trends because it excludes volatile goods, was seen falling to 4.34% from the previous 4.43%, with a monthly rate of 0.42%.

Despite the expected dip, December core inflation was still projected to exceed the Bank of Mexico's target range of 3%, plus or minus a percentage point.

The sticky core inflation remains a concern for the central bank, which cut its benchmark interest rate by 25 basis points last month to 7% but revised its forward guidance in a way that suggested a pause may be coming.

In its December statement, the governing board said it would "assess the timing of additional adjustments to the reference rate" going forward.

Analysts said this reflected a more cautious tone compared with previous communications, which hinted at further interest rate reductions.

Mexico's statistics institute is scheduled to release inflation data on Thursday, shortly before the central bank will publish the minutes from its December meeting.

The information from these releases will be crucial in shaping the central bank's next steps, with its next decision set for February 5.