At its May monetary policy meeting, Central Bank of Peru (BCR) decided to keep the policy interest rate unchanged at 2.75%, the latest FocusEconomics' LatinFocus Consensus Forecast report recalled.
"The Bank's decision took into account subdued inflation and declining inflation expectations. It also factored in below-potential, but strengthening, economic growth
," it noted.
As is known, inflation inched up last April after five consecutive months of decline. It came in at 0.5%, marginally above March's over eight-year low of 0.4%.
A reversal of supply shocks and below-potential economic growth were again behind the subdued inflation reading. Inflation —not counting food and energy— continued to moderate, as did inflation expectations for the next 12 months.
Moreover, unemployment —which had risen notably in both January and February— dropped in March.