Peru: Central Bank lifts reference rate
March 10, 2011
At its monetary policy meeting held on 10 March, the Central Bank raised the reference rate by 25 basis points to 3.75%, in a decision broadly expected by private sector analysts. The Bank's decision followed on rate hikes of the same magnitude in January and February. The Central Bank claimed its decision was a pre-emptive move in a global inflationary environment, as international grain and oil prices are likely to boost inflation in the months to come. In its statement, the Bank stated that it will seek to stem the impact of these external shocks on inflation expectations. Moreover, monetary officials acknowledged that current and forward-looking indicators continue to point to rapid growth in economic activity and confirm the resilient global recovery. Nevertheless, risks regarding the fiscal position of some countries, as well as the ongoing Middle East and North Africa crises persist. The next monetary meeting is scheduled for 7 April.
Author: Ricardo Aceves, Senior Economist