Central Reserve Bank of Peru Drops Hint of Coming Rate Increase
March 12, 2010
Peru’s central bank reference interest rate was left by officials at 1.25% after this week’s policy meeting. It has been at that level since a 75-basis point reduction last August. That had been the seventh consecutive monthly easing from a peak of 6.5% in the beginning of last year. Other reduction amounts were 25 bps each in February and March and 100 bps in each of the following four months.
A new statement today speaks of “clear signs” in activity of “recovery” and “dynamism” and an absence of “signals of inflationary pressures in the short term.” However, CPI inflation of 0.84% on year in February after 0.44% in January was closer to the 1.0% target, and officials served notice that a start to normalizing policy may be coming soon: “If required [the Board] will adopt preventative adjustments in the monetary policy to guarantee that inflation falls within the target range.”
Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission.
Tags: Peru
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