The Directory of Central Reserve Bank of Peru (BCRP) decided to reduce the reference interest rate by 25 basis points to 7.50%, because inflation has been reducing since the beginning of the year. However, The entity specified that this does not imply the beginning of a cycle of “successive reductions”, since there are future climate risks that may affect the downward trend in price increases.
In August the monthly inflation rate was 0.38% and the inflation without food and energy was 0.24%. The twelve-month indicator decreased from 5.88% in July to 5.58% in August, while the inflation rate without food and energy decreased from 3.89% to 3.81%. “Both indicators have been decreasing since the beginning of 2023, but continue to be above the upper limit of the inflation target range,” indicated the BCRP.
It is worth remembering that at a global level, the increase in international energy and food prices since the second half of 2021, accentuated by international conflicts, led to the inflation rate reaching positions not seen in many years and far from the goal of many central banks.
In Peru, transitory effects are recorded in the inflation greater than expected due to restrictions in the supply of some foods, although some have already begun to dissipate since June, the BCRP states. In addition, it foresees that the inflation target range (1% and 3%) will be reached at the beginning of 2024.
Along these lines, the expectations of inflation Twelve months fell from 3.57% in July to 3.36% in August, approaching the upper limit of the inflation target range.
“The leading indicators and expectations for the economy in August show a moderate recovery compared to the previous month, although they still remain in the pessimistic range. The shocks derived from “Social conflicts and the coastal El Niño have had a greater than expected impact on economic activity and domestic demand,” It exposed.
The next session of the Board of Directors in which the Monetary Program will be evaluated is scheduled for Thursday, October 5, 2023.
Source: Larepublica
Alia is a professional author and journalist, working at 247 news agency. She writes on various topics from economy news to general interest pieces, providing readers with relevant and informative content. With years of experience, she brings a unique perspective and in-depth analysis to her work.
