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Peru Monetary Policy July 2023

Peru: Central Bank stands pat in July; hikes possible ahead

At its 13 July meeting, the Central Bank of Peru kept its key policy interest rate unchanged at 7.75% for the sixth consecutive time.

The Bank decided to stand pat amid subdued economic activity and declining inflation. Headline inflation fell to 6.5% in June from May’s 7.9%. Meanwhile, inflation expectations over the next 12 months fell to 3.8% in June from May’s 4.2% but remained well above the Bank’s target range of 1.0–3.0%.

The Bank expects inflation to move close to the target range in the first stretch of next year amid lower international prices for food and energy, easing supply chain disruptions and decreasing inflation expectations. Our panelists see inflation ending the year above target. The Bank stated that July’s decision did not mean the end of the tightening cycle; it stands ready to resume hiking, depending on future inflation figures and the evolution of economic activity.

The next meeting is scheduled for 10 August.

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