Peru: Central Bank leaves rate unchanged in February
February 13, 2014
The Central Bank decided to maintain the reference rate at 4.00% at its 13 February monetary policy meeting, which was in line with market expectations.
As in its January report, the Central Bank acknowledged that the Peruvian economy cooled down in the third quarter of 2013 due to worse performance in the external sector. The deceleration in Peruvian export revenue mainly resulted from moderation in Chinese demand, as well as lower prices for international commodities.
The Bank also stated that inflation would remain at the upper band of the Bank's target range of 1.0%-3.0% in the coming months due to the delayed impact of recent supply shocks. However, the monetary authority sees inflation converging around 2.0% in the mid- and long-term. The Bank also announced that it would lower the average reserve requirement ratio for local currency deposits from 14.0% to 13.0%. The decision, which followed a similar decision in January, is aimed at supporting the expansion of credit and to soften a rapid depreciation of the local currency. The next monetary policy meeting will be held on 13 March.
The majority of the panelists polled by FocusEconomics expect monetary authorities to maintain the reference rate unchanged at 4.00% this year. For 2015, the panel expects an average monetary policy rate of 4.37% at the end of the year.