Central Reserve Bank of Peru Makes Third Interest Rate Cut

September 12, 2014

Peru’s monetary policy interest rate has been sliced to 3.5% from 3.75%, following 25-basis point cuts that were made in July and last November.  A previous tightening trend between May 2010 and May 2011 had lifted the rate from 1.25% to 4.25%.  A statement released by Peru’s Monetary Board warns that “this decision does not imply a sequence of reference rate cuts” and gives the following reasons for its action:

This 3.5% level of the reference rate is compatible with a projected rate of inflation within the target range in 2014 and with inflation converging to 2.0 percent in 2015. This forecast takes into account that: i) current and advanced indicators of economic activity continue to show a weaker-than-expected pace of growth; ii) inflation expectations remain anchored within the inflation target range; iii) recent indicators show mixed signals of recovery in the world economy, and iv) the supply factors that led inflation to increase are moderating.

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



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