The Central Reserve Bank of Peru (BCRP) agreed on Thursday to raise the reference interest rate to 3.00%, as part of the normalization of monetary policy.
It is worth noting that the modification is 50 bps. given that in December it stood at 2.50%. This new rate had not been registered since February 2018.
The decision taken by the board of the BCRP is explained by the increase in inflation for twelve months, which rose from 5.66% in November to 6.43% in December, thus reaching levels above the target range due to higher prices. of the international prices of food and fuel inputs, as well as the exchange rate.
The BCRP estimates that inflation will return to the target range in the fourth quarter of this year due to the reversal of the effect of transitory factors on the inflation rate (exchange rate, international fuel and grain prices) since economic activity will still be below its potential level.
In addition, the increase in the reference interest rate is due to the fact that inflation expectations for 2022 rose from 3.5 to 3.7%, above the upper limit of the inflation target range; and because most indicators of expectations about the economy continue in a pessimistic stretch as of December.
Finally, the BCRP expects the recovery process to continue in the coming quarters as global vaccination and significant fiscal stimulus programs continue to advance in developed countries.
.
Kingston is an accomplished author and journalist, known for his in-depth and engaging writing on sports. He currently works as a writer at 247 News Agency, where he has established himself as a respected voice in the sports industry.
