Peru Monetary Policy


Peru: Central Bank has left interest rates unchanged for two years

May 9, 2013

At its 9 May monetary policy meeting, the Central Bank left the reference rate unchanged at 4.25%, in a move expected by the market. The decision marks the 24th consecutive month in which the Bank has refrained from changing the main policy rate.

In its accompanying statement, the Central Bank argued that inflation is expected to slow further in the coming months and gradually converge to the Bank's 2.0% target. In addition, the Bank acknowledged that recent economic data suggest that growth has stabilized around its sustainable long-term rate, although latest indicators from the external sector point to a deterioration. The next monetary policy is scheduled for 13 June.

In May, the Central Bank did not modify the reserve requirement ratio after having raised it several times in recent months, both on national and foreign currency deposits, in order to cushion the impact of capital inflows from abroad on the expansion of credit and, consequently, on the appreciation of the local currency.

A majority of panellists polled by LatinFocus Consensus Forecast expect that monetary authorities will maintain the reference rate unchanged this year, with a year-end projection of 4.33%. For 2014, the participants expect the monetary policy rate to end the year at 4.62%.

Author:, Senior Economist

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Peru Monetary Policy Chart

Peru Monetary Policy May 2013

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

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