Peru | Central Bank hikes the policy rate… but maintains real policy stance

Summary

The Board of the Central Bank decided to increase the monetary policy rate from 5.50% to 6.00% in July. The Bank maintained unaltered the monetary policy stance understood as the real, ex-ante, policy rate.

Key points

• Key points:
• The policy rate increased by 50 basis points again and now stands at 0,65% in real terms (June: 0.61%).
• The Bank insisted that the higher inflation observed in June 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%) between the second and third quarter of next year.
• Inflation expectations increased from 4.9% to 5.4% in June.
• We expect the Central Bank to continue hiking, taking the reference rate above 7.00% in the following months.

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