Peru | Accommodative monetary policy remains after inflation spike

Summary

The Board of the Central Bank decided to maintain the monetary policy rate at 0,25% in February. The Bank renewed its commitment to maintain a strongly expansive stance for a prolonged period, acknowledging the impact of the second wave of COVID infections on economic activity and business confidence.

Key points

• Key points:
• The monetary authority stated that it expects inflation to remain in the target range throughout 2021 and 2022 and print in the lower half (between 1 and 2 percent) at the end of the year.
• The monetary authority commented on the higher inflation observed in January, pointing at specific supply factors in the prices of food and gas that drove it.
• The Bank also remarked on its efforts to provide liquidity and their impact on credit.
• The Central Bank remarked on the deterioration of business confidence because of the new confinement measures, in a context of a second wave of contagions.

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