The Minister of Economy and Finance, José Arista, responded to the president of the Central Reserve Bank of Peru (BCRP), Julio Velarde, after the latter questioned that the MEF lost technical management and was bowed down by Congress.
To the press, Arista maintained that Velarde must be more proactive with the reduction of the reference interest rate in order to recover the economy more quickly.
“Julio should listen to the MEF’s request and the request is to be more proactive in reducing the BCRP interest rate because we see that the real ex post interest rate is quite high and this really does not help to reactivate the economy with the speed that we would like,” he said.
Likewise, about the inflation estimated by the president of the BCRP between 2% and 2.2% by the end of 2024, Arista emphasized that “If Julio says it, we’ll have to believe him, I hope he’s not as wrong as last year.”
On the other hand, regarding the projections of some local economists about the recovery in terms of monetary poverty In 26 years, the MEF representative claims not to know who would have given that figure and that for him too “it is clearly an excess.”
It is worth adding that the Private Competitiveness Council calculated that if the Peruvian economy maintains an annual rate of 3% in its GDP, it would take more than 20 years to reduce poverty to 20% of the population—like the year before the pandemic.
Reference interest rate reduced to 5.75%
The BCRP board agreed to reduce the reference interest rate by 25 basis points, and bring it to 5.75% by May of this year. This means 2 percentage points less than the peak of 7.75% that was maintained for a long time to mitigate inflation.
In that line, The 12-month inflation rate decreased from 3% in March to 2.4% in April, so it is within the target range, while 12-month inflation without food and energy fell slightly from 3.1% to 3% between March and April; in this way it is placed at the upper limit of the target range.
Source: Larepublica
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