Peru Monetary Policy January 2017


Peru: Central Bank holds interest rate at 4.25% in January

January 12, 2017

In line with market expectations, the Central Bank decided to maintain the reference rate at 4.25% at its 12 January meeting.

According to the Central Bank, inflation expectations were within the target range of 1.0% to 3.0% and show a downward trajectory. Inflation in December was 3.2%, a notch lower than the 3.3% registered in November. The Bank stated that it expects inflation to be within the target range by mid-2017. A drought in recent months has pushed up prices for certain foods but the Bank projects these effects to fade soon.

The Central Bank commented that the global economy has improved and volatility in the global financial markets has reduced recently. In the domestic economy, activity has slowed down recently on the back of lower government spending. The Bank expects the economy to grow close to its potential in the coming quarters.

The next monetary policy meeting is scheduled for 9 February.

Panelists participating in the LatinFocus Consensus Forecast expect an average monetary policy rate of 4.38% at the end of 2017. For 2018, the panel projects an average rate of 3.45% at the end of the year.

Author: Marlène Rump, Senior Data Analyst

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Peru Monetary Policy Chart

Peru Monetary Policy January 2017 0

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

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