Peru | BCRP tightens the policy stance again, end of the hiking cycle?

Summary

The Board of the Central Bank decided to increase the monetary policy rate from 7.00% to 7.25% in November. The Bank tightened the monetary policy stance understood as the real ex-ante policy rate to a slightly more restrictive level.

Key points

• Key points:
• The policy rate increased by 25 basis points again and now stands at 2.47% in real terms (October: 2.11%).
• The Bank explained that the higher inflation observed in October is a result of the increase in the international price of food inputs and fuels.
• The monetary authority maintained its inflation forecast and expects it to return to the target range (2% +/- 1%) in the second semester of next year.
• Inflation expectations decreased from 4.9% to 4.8% in October.
• We maintain that additional adjustments to the reference rate will be decided on a meeting-by-meeting basis and be highly dependent on the speed of descent of inflation and its expectations. We do not rule out any additional adjustment to the reference rate.

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