Another Peruvian Central Bank Interest Rate Hike

March 11, 2022

Monetary policy normalization continues in Peru, where CPI inflation has risen from 2.4% last April to 6.15% last month. There have now been eight policy rate hikes in all, starting with a 25-basis point increase to 0.5% then and followed by seven consecutive half percentage point hikes. The Central Reserve Bank of Peru‘s interest rate now becomes 4.0%, and the goal is to return inflation to its 1-3% target. Officials no longer think that can be accomplished by the end of this year but are hoping it will occur by mid-2023. Officials acknowledge that “recent international conflicts have increased uncertainty in the recovery of the world economy and in the magnitude of upward pressures on commodity prices… In a context of uncertainty, financial volatility persists, with BCRP policies aiming at mitigating it.” The policy normalization process does not appear over.

Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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