Peru: Central Bank unexpectedly raises interest rates
January 6, 2011
At its monetary policy meeting on 6 January, the Central Bank raised its reference rate by 25 basis points from 3.00% to 3.25%. The move surprised private sector analysts, who had anticipated the key rate would remain steady for a fourth consecutive month. In October, policy makers unexpectedly paused a tightening cycle that had begun in May. Monetary authorities claimed their decision was a pre-emptive move taking into account domestic and international factors. Dynamic domestic demand, as well as high global food and energy prices are likely to fuel inflationary pressures in the months to come. The Bank stated that future adjustments in the reference rate will depend on new information about the evolution of inflation and its determinants. The next monetary meeting is scheduled for 10 February.
Author: Ricardo Aceves, Senior Economist