Peruvian Key Interest Rate Lifted 25 Basis Points

May 12, 2011

The Central Reserve Bank of Peru also has raised its key reference rate in a hurry after having cut such extensively during the world recession.  The rate was reduced by 525 basis points from 6.5% prior to February 2009 to 1.25% just six months later.  Today’s increase of 25 basis points was the tenth increase of the current tightening cycle that began in May 2010 and the fifth in a row.  At 4.25%, the reference has been raised by 300 basis points thus far, reversing over half of the prior easing.  CPI inflation in April stood at 3.3%, up from 2.7% in March, and the core rate of 2.6% compares to 2.4% in the previous month. A statement released by officials speaks of a readiness to tighten further as needed to ensure that inflation holds near their target.  The next meeting of the Policy Board will be on June 9.

Copyright Larry Greenberg 2011.  All rights reserved.  No secondary distribution without express permission.

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