Peru Monetary Policy April 2016


Peru: Central Bank holds interest rate at 4.25%

April 14, 2016

The Central Bank decided to maintain the reference rate at 4.25% at its 14 April monetary policy meeting. The Central Bank has hiked the rate four times in the past eight months. The majority of market analysts expected the Bank to keep the rate at last month’s level.

According to the Central Bank, inflationary pressures have cooled off as prices fell for some food products and the sol is no longer depreciating against the U.S. dollar. The Bank also added that inflation expectations have started to decline.

The Central Bank commented that the global economy continues to send mixed signals regarding growth and that lower volatility was seen in financial markets. Regarding Peru’s economy, the Bank reported that recent indicators suggest activity is recovering.

Based on this evaluation, the Bank considered it appropriate to hold the reference rate. The next monetary policy meeting is scheduled for 12 May.

Panelists participating in the LatinFocus Consensus Forecast expect an average monetary policy rate of 4.55% at the end of 2016. For 2017, the panel projects an average rate of 4.74% at the end of the year.

Author: Marlène Rump, Senior Data Analyst

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Peru Monetary Policy Chart

Peru Monetary Policy April 2016

Note: Central Bank Reference Rate in %.
Source: Peru Central Bank (BCRP).

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