Peru Monetary Policy June 2016


Central Bank holds interest rate at 4.25% in June

The Central Bank decided to maintain the reference rate at 4.25% at its 9 June monetary policy meeting, which was a decision in line with the majority of market analysts’ expectations. The Bank has hiked the rate four times in the past ten months.

According to the Central Bank, inflationary pressures have cooled off as inflation expectations have continued to decline gradually and the rise of prices for food and utilities is no longer exerting upward pressure on inflation. In addition, the exchange rate of the sol against the U.S. dollar remained broadly stable last month.

The Central Bank commented that the global economy continues to send mixed signals and that a certain level of volatility in global financial markets persists. Moreover, the Bank reported that Peru’s economic growth is close to its potential. Based on this assessment, the Bank considered it appropriate to hold the reference rate. The next monetary policy meeting is scheduled for 14 July.

Panelists participating in the LatinFocus Consensus Forecast expect an average monetary policy rate of 4.40% at the end of 2016. For 2017, the panel projects an average rate of 4.63% at the end of the year.

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Peru Monetary Policy Chart

Peru Monetary Policy June 2016

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

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