Peru: Central Bank leaves rates on hold and hints at possible rate cut
November 10, 2011
At its 10 November monetary policy meeting, the Central Bank left the reference rate at 4.25%, in a decision broadly expected by private sector analysts. The Bank's decision represents the sixth consecutive month that monetary officials have left interest rates unchanged. The Bank stated that the current moderation in economic growth, particularly observed in some components of spending, along with heightened uncertainty in the global financial markets and its potential negative impact on global growth were the main factors behind its decision. In addition, monetary authorities argued that, while external shocks continue to affect prices, inflation expectations remain within the Bank's target range of 2.0% 1.0%. Officials also stated that ?if these trends continue, the Central Bank will modify its monetary policy position?, indicating a rate cut in the near future. The next policy meeting is scheduled for 7 December.
Author: Ricardo Aceves, Senior Economist