Peru Monetary Policy October 2016


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

October 13, 2016

The Central Bank decided to maintain the reference rate at 4.25% for the eighth consecutive month at its 13 October monetary policy meeting, in line with market expectations.

According to the Central Bank, inflation expectations continued to decline gradually and inflation in July, August and September was very close to the Bank’s upper limit target of 3.0%. In the same months, upward pressures on inflation exerted by the rise in prices for food and services as well as the development of the exchange rate (USD-PEN) eased.

The Central Bank commented that the global economy continues to send mixed recovery signals in employment and production levels, while volatility in the global financial markets has cooled down. 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 10 November.

Panelists participating in the LatinFocus Consensus Forecast expect an average monetary policy rate of 4.24% 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 Chart

Peru Monetary Policy October 2016

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

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