Peru’s Monetary Policy Interest Rate Also Hiked by 50 Points but Still Below Inflation

February 10, 2022

Today’s increase was the fifth straight month with a half-percentage point increase and preceded by a 25-basis point initial rise last September. But at 3.5%, the new policy rate level of the Central Reserve Bank of Peru over two percentage points less than CPI inflation of 5.68% in January. More increase are probable in this tightening cycle. According to a statement, officials are hopeful that in-target inflation (i.e., within a range of 1-3%) will be restored by yearend, but doubts were expressed. They will be monitoring both actual inflation and measures of 1-year out expected inflation.

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