Peru: Central Bank keeps interest rates unchanged
August 8, 2013
The Central Bank left the reference rate unchanged at 4.25% at its 8 August monetary policy meeting, in a decision expected by the market. The Bank has maintained the reference rate unchanged since May 2011.
Monetary officials justified the decision to keep rates unchanged given that economic growth has stabilized around the sustainable long-term rate and inflation expectations remain anchored within the Bank's target range (1% - 3%). That said, monetary authorities reiterated that, "the board, if necessary, will take additional steps to relax reserve requirements," in order to spur lending and promote economic growth. The next monetary meeting is scheduled for 12 September.
The majority of panellists polled by LatinFocus Consensus Forecast expect monetary authorities to maintain the reference rate unchanged this year, with a year-end projection of 4.23%. For 2014, the participants expect the monetary policy rate to end the year at 4.40%.
Author: Ricardo Aceves, Senior Economist