The inflation rate in Peru would return to its target range in the second half of next year, said the central manager of Economic Studies of the BCRP, Adrián Armas, during the presentation of the Monetary Program of December 2021.
“What we would expect is that the year-on-year inflation rate begins to decline significantly as of mid-2022 and inflation would be returning to the target range in said semester,” he said.
The representative of the monetary entity also indicated that in the coming months a partial moderation in prices is expected, “but no further increases.”
In addition, he stressed that the increase in inflation in the Peruvian economy has been a “synchronized worldwide” phenomenon.
The inflation that we are experiencing now begins its increase in the month of July and August, in which in two consecutive months we had inflation rates of 1%, the same as happened at the world level ”, he pointed out.
It should be noted that the annualized inflation rate as of November is 5.66%, temporarily placing it above the target range due to factors such as the increase in international prices of food and fuel supplies, as well as the exchange rate.
Reference rate increase would be replicated
On the other hand, the board of directors of the Central Reserve Bank raised the reference interest rate to 2.50%, this figure is higher than the prepandemic period when it was found at 2.25%.
In this regard, the entity pointed out that “monetary policy continues to be expansive and the decision does not necessarily imply a cycle of successive increases in the reference interest rate.”
In this sense, Adrián Armas explained that the effect of monetary policy interest rate “It affects more short-term loans and those with low credit risks.”
While the interest rate on smaller loans depends more on “credit risk” and the fixed costs associated with the service.
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