Peru Monetary Policy July 2016

Peru

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

July 14, 2016

The Central Bank decided to maintain the reference rate at 4.25% at its 14 July monetary policy meeting, which was in line with market expectations. This was the fifth consecutive month in which the Bank left the rate unchanged.

According to the Central Bank, inflation expectations continued to decline gradually in June and the rise in prices for food and utilities is no longer exerting upward pressure on inflation.

The Central Bank commented that the global economy continues to send mixed signals and that volatility in global financial markets cooled down recently. Moreover, the Bank reported that Peru’s economic growth remains close to its potential. Based on this assessment, the Bank considered it appropriate to maintain the reference rate. The next monetary policy meeting is scheduled for 11 August.

Panelists participating in the LatinFocus Consensus Forecast expect an average monetary policy rate of 4.35% at the end of 2016. For 2017, the panel projects an average rate of 4.70% at the end of the year.


Author: Marlène Rump, Senior Data Analyst

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Peru Monetary Policy July 2016 3

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


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