Central Reserve Bank of Peru Maintains an Easing Bias

February 14, 2014

The Peruvian reference interest rate, which was cut by 25 basis points to 4.0% in mid-November but left unchanged last month, was retained again after officials met yesterday.  However, reserve requirements were cut: “The rate of maximum mean reserve requirements and marginal reserve requirements in domestic currency was lowered from 14 to 13 percent….. The Board oversees the inflation forecasts and inflation determinants and, if necessary, will implement additional measures to ease its monetary policy instruments.”  Although inflation is currently marginally above the upper end of a target range centered on 2%, confidence is expressed in a released statement that such will converge eventually on the target midpoint.  Supply factors caused the rise in inflation and are now moderating.  On the demand side, the economy will be expanding more slowly than its potential trend.  The Board next scheduled policy announcement will be on March 13.

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



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