He Central Reserve Bank of Peru (BCRP) agreed to keep the reference interest rate at 7.75%, which does not necessarily imply the end of the cycle of interest rate hikes, the entity specified. Future adjustments in the reference rate will be conditional on new information on inflation and its determinants, including the macroeconomic effects of recent social events, they remarked.
“A downward trend in year-on-year inflation is projected since March with a return to the target range in the fourth quarter of this year, due to the moderation of the effect of international food and energy prices, the reversal of supply shocks in the agricultural sector and a reduction in inflation expectations for the rest of the year,” the entity stated.
In February the inflation for the month reached 0.29%, without food and energy it was 0.27%. While the 12-month inflation rate fell from 8.66% in January to 8.65% in February, without food and energy this indicator increased from 5.80% in January to 5.87% in February. Both indicators were above the upper limit of the inflation target range
In addition, they specified that the growth prospects of world economic activity have shown a slight improvement, although the global risk remains due to the effects of restrictive monetary policy in advanced economies, the impact of inflation on consumption and international conflicts.
In the same meeting, the Board of Directors agreed to maintain the following interest rates for BCRP operations in national currency with the financial system under the over-the-counter modality.
- Overnight deposits: 5.25% per year
- Direct repo operations of securities and currency, and Monetary Regulation Credits: 8.25% per annum for the first 10 operations in the last 3 months; the interest rate set by the Monetary and Exchange Operations Committee for additional operations to these 10 operations in the last 3 months.
It should be remembered that the next meeting of the Board of Directors in which the Monetary Program will be evaluated is scheduled for on Thursday, April 13, 2023.
Source: Larepublica
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