The Central Reserve Bank of Peru has approved to maintain the monetary policy interest rate at 3.50%.
This decision came after inflation returned to the target range (between 1% and 3%) due to the reversal of supply shocks.
Moreover, measurements of
inflation trends are also within the inflation target range and inflation is projected to continue declining in the following months.
The decision was also based on the fact that expectations of inflation in 12 months continue to be within the inflation target range.
On the other hand, the pace of growth of domestic economic activity continues to be below its potential growth level, although it is expected to show greater dynamism due to the increase of government and private expenditure.
Additionally, the world economy continues to show a gradual recovery, although there is still some uncertainty associated with an eventual reversal of central banks' monetary stimulus in the advanced economies.
BCR remains vigilant
BCR gives close attention to new data on inflation and inflation determinants; plus, it stands ready to make additional adjustments in the Central Bank's monetary policy stance if necessary.
Inflation in September recorded a rate of -0.02%, causing the year-to-year rate of inflation to fall from 3.17% in August to 2.94% in September.
Inflation is expected to remain within this range in during 2017 and 2018.
Inflation without food and energy showed a rate of -0.01%, causing the year-to-year rate to drop from 2.57% in August to 2.45% in September, also within the target range.
The session also approved to maintain the annual interest rates on lending and deposit operations in domestic currency (not included in auctions) between BCR and the financial system.
(END) JJN/JJN/RMB
Published: 10/13/2017