The directory of Central Reserve Bank of Peru (BCRP) raised the benchmark interest rate to 3.50% as part of the normalization of monetary policy.
It is worth emphasizing that this represents an increase of 50 basis points compared to January. This decision was made considering that the twelve-month inflation rate was 5.68% in January, temporarily passing the target range after the increase in international prices of food supplies and fuel, as well as the exchange rate.
In that sense, the rate raised this Thursday had not been observed since October 2017.
On the other hand, the BCRP recalled that the twelve-month inflation rate without food and energy was 3.08% in the first month of 2022, above the upper limit of the target range.
The board of the issuing entity projected that it will return to the target range by the fourth quarter of this year due to the reversal of the effect of transitory factors on the inflation rate (exchange rate, international prices of fuels and grains), and also because the activity economy will still be below its potential level.
In this sense, they point out that twelve-month inflation expectations rose from 3.68 to 3.73%, and that most indicators of expectations about the economy continue in the pessimistic range.
Source: Larepublica
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