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Peru Policy Interest Rate 6.0% (consensus 6.25%) in Apr-24

• The BCRP unexpectedly reduced the policy rate to 6.0% despite market expectations for no change after March’s inflation spike, which the BCRP considers transitory amid ongoing declines in year-on-year inflation rates.
• Future policy decisions will hinge on inflationary trends and global economic conditions, ensuring the bank remains agile in its monetary policy approach.
• The bank’s readiness to adjust its policy stance in response to evolving economic data underscores a commitment to achieving its inflation target while managing potential external risks and financial market volatilities.

Peru Policy Interest Rate 6.25% (consensus 6.0%) in Mar-24

• The Central Reserve Bank of Peru (BCRP) unexpectedly maintained its policy rate at 6.25%, against consensus expectations for a cut. It signalled a careful approach to managing inflationary pressures while initiating a complementary easing through reduced reserve requirements.
• This policy decision focuses on liquidity enhancement and economic stimulation without exacerbating inflationary risks, reflecting a nuanced balance in monetary policy strategy.
• Future adjustments to the BCRP's monetary stance will be closely tied to inflationary trends and economic indicators, with a steadfast commitment to guiding inflation back within the target range amid global uncertainties and domestic economic challenges.

Peru Lima CPI Inflation 0.56% m-o-m (consensus 0.2%) in Feb-24

- Lima's CPI inflation in February 2024 exceeded expectations, with a 0.56% m-o-m increase, the highest since March 2023.
- The resurgent inflation rate surpasses the one-year average by 0.29 percentage points.

Peru Policy Interest Rate 6.25% (consensus 6.25%) in Feb-24

• The BCRP reduced the reference rate by 25bps to 6.25% in response to favourable inflation data and a downward trend in global inflation, indicating an adaptive and data-driven approach to monetary policy.
• Future policy adjustments will hinge on a comprehensive analysis of inflation trends, economic activity indicators, and external economic risks, maintaining a balanced approach towards achieving the inflation target.
• The Bank’s vigilance towards climate risks and international conflicts underscores its proactive stance in mitigating potential inflationary pressures and stabilizing economic growth.