Central Reserve Bank of Peru

September 11, 2015

With higher food costs, a depreciation exchange rate, and upwardly drifting expected inflation lifting actual CPI inflation in Peru, the central bank raised its key interest rate to 3.50% from 3.25%.  This monetary policy tightening broke a streak of seven meetings without a policy change and constitutes the first interest rate hike since May 2011.  In between, the rate was cut four times between November 2013 and January 2015, each by 25 basis points.  The released statement notes that real GDP is still expanding more slowly than potential GDP but recovering nonetheless and projected to climb faster in the second half of the year than the first half.  As of August, total CPI inflation stood at 4.04%, and core inflation was 3.48%.

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



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