Peru’s central bank held interest rates at 4.75% while assessing the impact of global trade tensions. The decision was in line with most economists’ expectations. The bank noted local inflation trends are positive but stressed increased uncertainty from trade policies, particularly those from the U.S., which may affect exports. Peru anticipates economic growth of 3% this year with inflation expected to decline further.
Peru’s central bank opted to maintain its key interest rate at 4.75%, as officials assess the potential inflationary consequences of ongoing global trade tensions. This decision aligned with the expectations of seven out of eleven economists surveyed by Bloomberg, while four analysts anticipated a reduction to 4.5%. The bank acknowledged some favorable trends in local inflation rates, yet highlighted increased global economic risks stemming from heightened uncertainty surrounding trade restrictions.
In its official statement, the central bank indicated that “high volatility in financial markets is being observed” due to these factors. Currently, Peru enjoys one of the lowest inflation rates among emerging markets and demonstrates economic growth that surpasses that of its regional neighbors. However, the government recognizes the looming threat posed by U.S. trade policies, which may adversely affect Peru’s metal and fruit exports.
For instance, Peru’s yearly inflation rate decreased to 1.5% in February, and the bank now predicts it will lower to approximately 1% this month. Additionally, economic growth is estimated to reach 3% for the year. Energy and Mines Minister Jorge Montero shared plans for a delegation to negotiate against potential tariffs on copper exports, while Agriculture Minister Angel Manero expressed skepticism regarding targeted tariffs on Peruvian agricultural goods. He further stated that the country would seek assistance from the World Trade Organization if necessary.
In conclusion, Peru’s central bank decided to keep interest rates steady at 4.75% amid uncertainties from global trade issues. While local inflation trends are positive, risks remain due to potential tariffs on key exports. Despite these challenges, Peru is poised for economic growth and is proactive in addressing potential trade tariff impacts.
Original Source: www.livemint.com
