Central Reserve Bank of Peru

Peruvian Central Bank Interest Rate Cut

September 15, 2023

The board of directors at the Central Reserve Bank of Peru as expected cut its reference interest rate by 25 basis points to 7.50%. This reduction reverses the final hike of 25 basis points in a sequence of tightening from a starting point of 0.25% in August 2021 that ended at 7.75% in January 2023. […] More

Dollar and Price of Oil Strengthen Further

September 15, 2023

Chinese data for August released Friday beat expectations. On year increases in retail sales and industrial production of 4.6% and 4.5% represent 3- and 4-month highs, and the jobless rate fell 0.1 percentage point back to the 5.2% level of the second quarter. That was the lowest in 16 months. To be sure, there were […] More

Risk Aversion Persists as Investors Get Ready for U.S. PPI Release

August 11, 2023

Any sense of investor complacency after Thursday’s CPI figures was squelched by San Francisco Fed President Daly’s cautionary remarks that sustainable price stability will remain elusive without less labor market tightness than exists currently. An enduring impact of former Fed Chairman Volcker’s victory over inflation forty years ago is that higher-than-desired U.S. inflation provides support […] More

Capping a Big Week in Financial Markets Driven By Lower Inflation Readings

July 14, 2023

In the past week, the Dow Jones Industrial Average has jumped 1000 points, the 10-year U.S. Treasury yield has plunged 28 basis points, and the dollar has depreciated 2.7% against the yen and 2.4% against the euro. If inflation continues to recede, the Federal Reserve may not need to lift interest rates as much as […] More

Little Market Reaction to Trump’s Indictment on Mishandling Classified Documents

June 9, 2023

The story of former U.S President Trump’s second indictment on criminal charges broke late yesterday. This development is unlikely to damage his prohibitive opinion poll lead among Republican candidates for that party’s presidential nomination next year, nor has it impacted financial markets, which are now awaiting important cues next week from central banks meeting in […] More

Investors Sensing the Beginning of the End of the Cycle of Rising Central Bank Interest Rates

April 14, 2023

The hope that central bank rates are nearing their peak continues to take some air out of the dollar’s tires. The weighted dollar index touched its lowest level overnight since April 21 of last year and so far has lost a tad over 12% since peaking seven months ago. Compared to Thursday closings, the dollar […] More

Less Confidence About Where Inflation May Be Headed

January 13, 2023

Financial market participants are grasping for every straw about inflation the way they once did regarding news about the Covid-19 pandemic. Because there is so much uncertainty regarding each, wide daily and intra-day swings have become common, as each incremental piece of news tips sentiment. In the short first two weeks of 2022, one story […] More

Peru and Serbia

December 8, 2022

At other central banks, the restoration of price stability remains the dominant priority. The Central Reserve Bank of Peru’s interest rate benchmark has undergone a fourth straight 25-basis point hike, reaching 7.5% versus 0.25% at the end of 2020 and 2.5% at the end of 2021. Peruvian inflation accelerated 0.2 percentage points to 8.45% in […] More

Pick Your Poison: Excessive Inflation, Stagnant Growth or, Most Likely, A Mix of Both

December 8, 2022

The lagged effects of higher interest rates are biting into economic growth, but inflation remains way too high. This mix presents central bankers with a tougher decision, and financial market participants are getting whip-sawed. Compared to Wednesday closing levels the dollar is down 0.4% against the Canadian and Australian dollars, 0.2% versus the euro and […] More

Mexican and Peruvian Monetary Policies Tightened

November 11, 2022

Interest rate hikes were announced late Thursday in Mexico and Peru. The Bank of Mexico‘s overnight interbank interest rate was raised by an as-expected 75 basis points to 10.0%. The policy rate has been increased at twelve straight policy reviews since June 2021, including moves of 75 basis points each in the latest four instances. […] More