Julio Velardepresident of Central Reserve Bank of Peru (BCRP)described as “painful” the fact of responding to the Minister of Economy and Finance, Jose Aristawho days ago He referred to Velarde’s performance at the helm of the state entity. As recalled, both political figures had an exchange of words in the media regarding the work and management of their respective public institutions.
At a recent mining conference, Julio Velarde tried to settle any type of confrontation with the head of the portfolio of Economyby pointing out thator are faced and considers that these types of situations “are not good.” This way, Velarde referred to what was said by Jose Aristawho asked for more proactivity to reduce the interest rate as it is “quite high and does not help reactivate the economy.”
José Arista on the management of the BCRP by Julio Velarde: “make it more proactive”
The Minister of Economy, Jose Aristaspoke regarding the work of Julio Velarde at the head of the BCRPhighlighting certain disagreements in economic strategy. Edge has mentioned that, although he recognizes the experience and trajectory of Velardeconsiders that some approaches to central bank are not aligned with the current needs of the countryso he urged Velarde to be more proactive to help in reducing the interest rate. This occurred within the framework of
“July (Velarde) should also listen to the request of the Ministrywhich is to be more proactive in reducing the interest rate of the Central Bank because we see that it’s quite high and it does not help to reactivate the economy with the speed we would like,” he said. Jose Aristahead of economics.
Julio Velarde on Arista’s request: “it would be easy to believe that growth can be achieved by lowering the interest rate”
After what was said by Jose Arista, Minister of Economy and Finance, Julio Velarde He pointed out that this factor does not define the growth of a country. Likewise, he emphasized that Peru has one of the lowest interest rates in Latin America, even below the United States, Canada and Japan.
According to Velarde, the value of the interest rate changes in response to inflation. “Within the region, the country that rose the least was Peru, the others such as Mexico, Colombia, Chile and Brazil reached double digits,” said the president of the BCRP board.
What is the inflation rate and how does it affect the economy?
The interest rate is the cost of borrowing money, expressed as a percentage of the loan amount. For example, if you borrow 100 soles with an interest rate of 5%, you must return 105 soles. Interest rates affect the economy in several ways: When rates are low, borrowing is cheaper, which encourages spending and investment. This can stimulate economic growth. However, if rates are high, the cost of borrowing increases, which can reduce spending and investment, slowing economic growth.
Source: Larepublica
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