Peru | Central Bank hikes monetary policy rate by 50bp to 1,00%

Summary

The Board of the Central Bank decided to increase the monetary policy rate from 0,50% to 1,00% in September. The Bank maintains an expansive policy stance but no longer mentions that it is considered appropriate.

Key points

• Key points:
• The monetary authority argued that the higher inflation observed in August is a result of transitory supply factors such as the increase in the international price of food inputs and fuels, coupled with a higher exchange rate.
• The monetary authority stated that it expects inflation to return to the target range (2% +/- 1%) in the next twelve months and remain inside the range during the rest of 2022.
• The monetary authority seems intent on providing a strong signal to the market of its commitment to price stability and thus align inflation expectations.

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