Peru's central bank maintained it monetary reference rate at 4.0 percent, saying this rate is compatible with inflation that will converge to the bank's target range in 2014 and to 2.0 percent in 2015.
The Central Bank of Peru (BCRP), which cut its rate by 25 basis points in November 2013 in what it described as a preventative move, said inflation is forecast to remain near the upper limit of the bank's target range due to the lingering effects of supply shocks before trending toward 2.0 percent.
The central bank targets inflation at a 2.0 percent midpoint within a one percentage point tolerance band on either side.
Peru's inflation rate rose marginally to 3.56 percent in May from 3.52 percent. Excluding food and energy, inflation was 2.82 percent, the bank said.
The central bank said leading indicators showed a temporary weakening of economic activity, with Gross Domestic Product growth less than its potential, mainly due to slower growth in investment and exports.
In the first quarter of this year, Peru's GDP expanded by an annual 4.8 percent, down from 6.9 percent.