Peru: Inflation moderates in September
October 5, 2015
Consumer prices for Metropolitan Lima in September increased just 0.03% over the previous month, which was below the 0.38% rise registered in August. The result undershot market expectations of a 0.20% increase. The result reflects that higher prices in several categories, including housing, fuel and electricity, as well as clothing and footwear, were offset by lower prices for transport and communications.
Inflation moderated from 4.0% in August to 3.9% in September. However, inflation is still well above the upper limit of the Central Bank’s target of 2.0%, plus/minus 1.0 percentage point. The sharp depreciation of the Peruvian sol is contributing to inflationary pressures and above-target inflation led the Central Bank to hike its main interest rate in September for the first time in over four years, to 3.50%.
Author: Carl Kelly, Economist