Central Reserve Bank Peru

April 11, 2014

Peru’s monetary policy bias remains skewed toward ease, but officials prefer to use non-interest rate instruments such as the further reserve requirement cut announced today after the monthly meeting.  The RR ratio drops to 12.0% from 12.5%, while the 4.0% reference interest rate was not changed.  This past November saw the reference rate reduced by 25 basis points, and that was its first cut since a drop of to 1.25% from 2.0% announced on August 7, 2009.  A statement released by the central bank’s Board today noted that both total CPI inflation of 3.38% in the year to March and core inflation of 2.78% were lower than in February, argued that supply-side strains that had lifted inflation previously were now fading, and predicted that the CPI rate would settle near the mid-point of its 1-3% target range.  Inflation expectations are moreover anchored.  The next meeting is scheduled for May 8.

Copyright 2014, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



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