Peruvian Monetary Policy Unchanged

May 11, 2012

The last reference interest rate hike by the Board of the Central Reserve Bank of Peru in May 2011 culminated a series of ten 25-basis point increases totaling 300 basis points from 1.25% to 4.25% that was begun a year earlier in May 2010.  It is now May 2012, and yesterday’s Board announcement kept the key monetary policy setting unchanged at 4.25% where such has been for the past year.  Officials target inflation between 1% and 3%, but the on-year increase of total consumer prices was above 4% in each of this year’s four prior months.  Officials attribute this overshoot to transitory supply-side factors, predict a sharp deceleration in the second half of this year, and maintain that expected inflation has stayed anchored.  Peruvian GDP should expand between 5% and 6% this year.

The next interest rate announcement will be on June 7.

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



Comments are closed.