Friday, December 9, 2011

Peruvian Central Bank Holds Rate at 4.25%

The Central Reserve Bank of Peru held its monetary policy reference rate unchanged at 4.25%.  The Bank said: "This decision takes into account the lower growth being recorded by some components of expenditure, the current international financial risks, and the rise of inflation associated mainly with temporary supply factors. Future adjustments in the reference interest rate will depend on the evolution of inflation and its determinants."

Peru's central bank also held the interest rate at 4.25% at its November meeting, while the bank last raised the monetary policy reference rate by 25 basis points to 4.25% in May this year.  Peru reported annual inflation of 4.6% in November, 4.2% in October, up from 3.73% in September, 3.35% in August and July, and compared to 2.9% in June, 3.07% in May, 3.34% in April, and above the Bank's 1-3% inflation target.  

The Peruvian economy expanded 1.6% in the June quarter, placing annual GDP growth over 6%.  The Peruvian Nuevo Sol (PEN) last traded around 2.70 against the US dollar, with the PEN gaining approx. 3.5% year to date.


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