Peruvian Monetary Policy Unchanged

September 6, 2012

The Central Reserve Bank of Peru left its policy reference interest rate steady at 4.25% and released a statement that characterized recent higher inflation of 3.5% as temporary.  While domestic demand is expanding near trend, global risks argue for caution.  The central bank’s key rate has been 4.25% since a final hike in May 2011 capped a streak of 10 moves totaling 300 basis points over the course of the preceding year.  During the Great Recession, by contrast, officials moved even more aggressively, slashing the rate from 6.5% at the start of August 2008 to 1.25% by the end of February 2009.

Copyright 2012, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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