Central Reserve Bank of Peru Hikes Interest Rate

December 11, 2015

A second 25-basis point increase has been engineered in Peru’s monetary policy rate to 3.75%.  An initial move of same size was decided this past September.  A statement from monetary authorities observes above-target inflation expectations and a recent acceleration of on-year CPI inflation to 4.17% in November from 3.66% in October.  The target range is 1-3%.  Currency depreciation has been a major inflationary forces.  The new sol has lost 26% against the dollar since end-2012, including a slide this year of more than 11%.  In addition, food prices are climbing faster, and so have utility costs.  Real GDP has been expanding below its trend potential but quickened in the final quarter of 2015 and is projected to parallel potential next year.  The next policy meeting is set for January 14.

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



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