Julio Velarde: Rise in energy prices makes it difficult to reduce inflation

The president of the Central Reserve Bank of Peru, Julio Velarde, affirmed this Tuesday that the external inflationary pressures and the rise in the price of energy make it impossible for the monetary authority to specify when the inflation rate in Peru will return to the target range of 1% and 3%.

In this regard, Velarde stated: “The Central Bank will do everything possible so that inflation returns to the target range within the horizon of monetary policy. before two years”.

During his participation in the 2021 Economic Forum, developed by AmCham Peru, the representative of the BCRP revealed that inflation this year will reach 4.6%, While for by 2022 it would reach 2.6%. However, he stressed that the projections could vary if the rise in energy resources continues.

“We estimated that (in) the second semester of next year (it) will return to the target range, but oil continues to rise and there are people who project that it will rise to USD 100.00 by the end of the year,” he commented.

Factors outside of monetary policy

Velarde also indicated that the interventions that the BCRP can carry out are insufficient to curb inflation, since there are factors outside the monetary policy that originate the increase. Among them, he made reference to the rise in the price of fertilizers, al shortage of some products in US and European markets, and weather phenomena that affect crops in other countries.

“In conclusion, the supply chain is being affected all over the world ”, he pointed out.