Tuesday, February 7, 2017

Honduras holds rate, inflation up but below target range

     The central bank of Honduras left its monetary policy rate at 5.50 percent, noting that inflation in January was above that of the same month last year but below the bank's target range.
      The Central Bank of Honduras, which cut its rate by 75 basis points last year and most recently in June, added that net international reserves remain at an adequate level.
      Honduras' inflation rate rose to 3.44 percent in January from 3.31 percent in December, below the central bank's target range of 3.5 percent to 5.5 percent around a midpoint target of 4.5 percent.
      The economy of Honduras last year performed in a manner that was similar to that of 2015, the bank said, highlighting "dynamism" in construction, financial intermediation, electricity and water, communications, manufacturing and agriculture.
    Earlier this month Manuel Bautista, president of the central bank, told Reuters that Honduras' economy was expected to expand between 3.7 and 3.8 percent this year, up from 3.6 percent in 2016, though in a worst case possible new U.S. policies may reduce growth to 2.7 percent.
     Bautista was referring to the possibility of policies that were mentioned during the U.S. presidential campaign by Donald Trump that could lead to lower remittances by Honduran workers in the U.S. or the deportation of immigrants.
     Bautista also said he expected inflation to accelerate to around 4.5 percent this year, up from 3.3 percent in 2016.



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