Central Reserve Bank of Peru

October 16, 2015

A 25-basis point increase of Peru’s monetary policy interest rate at the previous policy meeting in September had been the first rate hike since May 2011 and followed 25-bp cuts in November 2013, July 2014, September 2014 and January of this year.  It is the hope of monetary officials that September’s action will not launch a whole sequence of tightenings, and today’s meeting produced a decision to keep the interest rate at 3.5%.  A statement following the October meeting of the central bank Board observes that expected inflation remains anchored and attributes recent inflation to transitory factors:

Inflation has been affected by temporary supply factors, such as the rise in the prices of some food products and utility rates, and by the depreciation of the nuevo sol against the dollar, the effect of these factors not being foreseen to extend in a general manner to the rest of prices.

Regarding growth, the statement sees a stronger second half of 2015 than first half and anticipates expansion next year near its potential trend in contrast to this year’s sub-trend pace.

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

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