Peru Monetary Policy May 2016


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

May 12, 2016

The Central Bank decided to maintain the reference rate at 4.25% at its 12 May monetary policy meeting, as the majority of market analysts had expected. The Bank has hiked the rate four times in the past nine months.

According to the Central Bank, inflationary pressures have cooled off as prices fell for services and some food products. In addition, the depreciation of the sol against the U.S. dollar has slowed down. The Bank also added that inflation expectations have started to decline.

The Central Bank commented that the global economy continues to send mixed signals regarding growth and that lower volatility was seen in financial markets. Regarding Peru’s economic growth, the Bank reported that it is rebounding and expects it to reach its potential this year. Based on this evaluation, the Bank considered it appropriate to hold the reference rate. The next monetary policy meeting is scheduled for 9 June.

Panelists participating in the LatinFocus Consensus Forecast expect an average monetary policy rate of 4.46% at the end of 2016. For 2017, the panel projects an average rate of 4.65% at the end of the year.

Author: Marlène Rump, Senior Data Analyst

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Peru Monetary Policy Chart

Peru Monetary Policy May 2016

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

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