Julio Velarde, president of the Central Reserve Bank of Peru (BCRP)was pronounced this Friday, June 16, during the June 2023 inflation report, on the situation of the reference rate hikes in the United States.
As recalled, at the last meeting of the Federal Reserve (Fed), on June 15, it was unanimously decided that rates will not be raised after 10 consecutive hikes. Thus, they would remain between 5% and 5.25%.
In this regard, Velarde pointed out that the Fed’s decision was “surprising”, but at least two more increases are expected by the end of the year. In this sense, the projections of the members of the Reserve is that they reach 5.75% by the end of 2023.
“After several successive increases, it decided not to raise rates this time, given the projections it has for the rest of the year, and according to the survey of the members of the operating committee —those who decide on rate increases—It is being seen that two more increases are expected in the year and a decrease in interest rates in the United States in 2023 is almost being ruled out”, indicated Velarde. “Currently, the rate is at 5.25% and in the projections it is reaching 5.75% at the end of the year,” she added.
Similarly, he stated that inflation in the North American country has dropped slightly, from 3.3% to 3.2%; and its long-term goal remains at 2%. In addition, the growth projection for this year rose from 0.4% to 1% with a long-term advance of 1.8% per year and a possible recession has been ruled out, fears of which increased after the problems in the banks of that nation. .
It should be noted that the official also highlighted that in the entire region inflation expectations for Peru are the lowest, while the other countries continue to increase their interest rates (see graph).
On the other hand, the BCRP has maintained the reference interest rate at 7.75% for the fifth consecutive month. However, the entity specified that inflation in Peru will return to the target range of 3% only in 2024.
Source: Larepublica
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