He Central Reserve Bank of Peru (BCRP) reported this Thursday, May 11, that will maintain the reference interest rate at 7.75%. In addition, they pointed out that this does not necessarily imply that the cycle of increases will end, which are conditioned by new information on inflation and its determinants, including the macroeconomic effects of recent social events.
“It is projected to remain a downward trend in year-on-year inflation in the coming months 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”, can be read in the article.
It should be noted that the BCRP it took into account the monthly rate for April, whose inflation was 0.56% and inflation without food and energy was 0.20%. The twelve-month inflation rate dropped from 8.40% in February to 7.97% in April, however this indicator is still above the upper limit of the inflation target range.
“BCR maintained the rate at 7.75%, a level that was reached in January. It continues to expect a return to the 3% inflation ceiling in the fourth quarter of this year, although with the accumulated Jan-Apr rate at 2.35% and with 12-month expectations at 4.25%, it is unlikely that this will happen,” economist Juan Carlos Odar said on his networks.
Along these lines, it was 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 percent per year.
- Direct repo operations of securities and currency, and Monetary Regulation Credits: i) 8.25 percent annually for the first 10 operations in the last 3 months; and ii) the interest rate set by the Monetary and Exchange Operations Committee for additional operations to these 10 operations in the last 3 months. In addition, the Monetary and Exchange Operations Committee may establish higher rates based on the amount of the operations.
Thus, the next session of the Board of Directors in which the Monetary Program will be evaluated is scheduled for June 8.
Source: Larepublica
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