Peru Monetary Policy November 2016

Peru

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

November 10, 2016

The Central Bank decided to maintain the reference rate at 4.25% for the ninth consecutive month at its 10 November monetary policy meeting, in line with market expectations.

According to the Central Bank, inflation expectations are within the target range of 1.0% to 3.0%. The inflation rate in September and October was above the upper limit of 3.0%. The Bank stated that this was due to higher prices for fuel and some food items, an effect that should soon fade. Inflation is seen edging back down and falling within the target range in the next few months.

The Central Bank commented that the global economy continued to send mixed recovery signals in employment and production levels, and that the volatility in the global financial markets had picked up recently. Nonetheless, the Peruvian economy shows sound fundamentals and is growing at a healthy rate, the Bank stated.

Based on this assessment, the Bank considered it appropriate to maintain the reference rate. The next monetary policy meeting is scheduled for 15 December.

Panelists participating in the LatinFocus Consensus Forecast expect an average monetary policy rate of 4.25% at the end of 2016. For 2017, the panel projects an average rate of 4.44% at the end of the year.


Author: Marlène Rump, Senior Data Analyst

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Peru Monetary Policy November 2016 0

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


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