Peruvian Central Bank Rate Left at 3.5%
December 12, 2014
The last of many central bank policy announcements on Thursday confirmed that the Central Reserve Bank of Peru left its benchmark interest rate at 3.5% as most analysts were expecting. The policy interest rate had previously been cut three times by 25 basis points each at meetings held in November 2013 and July and September of this year.
A statement of explanation from the authorities predicts that inflation, now at 3.16%, will converge upon the 2% target next year, citing lower oil prices, sub-potential Peruvian economic growth, well-anchored inflation expectations that are within the target parameters, mixed signals pertaining to the global recovery outlook, and more elevated financial and foreign exchange market volatility. The bias of policy remains skewed toward easing as reflected in the further lowering of reserve requirements to 9.5% from 10%. The statement asserts, “The Board oversees the inflation forecasts and inflation determinants, and will implement additional monetary easing measures if it is necessary.” The first policy meeting of 2015 is scheduled for January 15.
Copyright 2014, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
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