Thursday, December 6, 2012

Peru holds rate steady as inflation hits target range

    Peru's central bank held its monetary policy reference interest rate unchanged at 4.25 percent, as widely expected, as inflation has continued to decline and is now within the bank's target range.
    The Central Reserve Bank of Peru (BCRP), which has held its rates steady since April last year, said it expects "this trend to be maintained in 2013, with inflation gradually converging to 2 percent."
    The central bank targets inflation of 1-3 percent and its president, Julio Velarde, recently said inflation should remain mild in December, with the rate ending this year around 2.8 percent and the declining further to around 2 percent in 2013.
    Velarde also forecast that the economy is expected to grow around 6 percent in 2013, similar to 2012. In 2011 Peru's Gross Domestic Product rose 6.9 percent.

    Peru's inflation rate slowed to 2.66 percent in November from 3.25 percent in October due to a decline in the cost of perishable foods, reversing earlier price rises.
    Peru's GDP expanded by 2.2 percent in the second quarter from the first for an annual growth rate of 6.1 percent, the same as in the first quarter and one of the highest growth worldwide on the back of investments in infrastructure and mining projects.
     The central bank said economic growth had stabilized around its long-run sustainable level but activity linked to export markets were weak.


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