Central Reserve Bank of Peru

June 11, 2015

Peru’s central bank interest rate, 3.25% since a 25-basis point cut last January, was kept unchanged at the June monthly policy meeting.  Earlier cuts of that size were implemented in November 2013 and twice during the third quarter of last year.  Officials can’t afford to cut the interest rate further at this time because of currency depreciation and continuing vulnerability and due also to an accelerating uptrend in consumer prices, which rose 0.6% on month and 3.4% on year in May.  The inflation target is 2%, which officials hope to secure next year.  It’s likewise difficult to raise interest rates given a slowdown in economic growth over the past year of 4.2 percentage points to a mere 1.6% in the latest four-quarter comparison.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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