Peruvian Monetary Policy Unchanged
May 11, 2012
The last reference interest rate hike by the Board of the Central Reserve Bank of Peru in May 2011 culminated a series of ten 25-basis point increases totaling 300 basis points from 1.25% to 4.25% that was begun a year earlier in May 2010. It is now May 2012, and yesterday’s Board announcement kept the key monetary policy setting unchanged at 4.25% where such has been for the past year. Officials target inflation between 1% and 3%, but the on-year increase of total consumer prices was above 4% in each of this year’s four prior months. Officials attribute this overshoot to transitory supply-side factors, predict a sharp deceleration in the second half of this year, and maintain that expected inflation has stayed anchored. Peruvian GDP should expand between 5% and 6% this year.
The next interest rate announcement will be on June 7.
Copyright 2012, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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