Peru’s central bank held the benchmark interest rate at 4.75%, consistent with analyst expectations, following a reduction from 7.75%. The inflation rate for 2024 settled at 1.97%, within target range. Future adjustments will be data-driven, acknowledging global economic uncertainties.
On Thursday, Peru’s central bank maintained its benchmark interest rate at 4.75%, aligning with analysts’ predictions. Since September 2023, this rate has been gradually decreased from a peak of 7.75% observed in the early part of the year. Peru now has one of the lowest benchmark interest rates in Latin America.
By the end of 2024, Peru’s inflation rate stabilized at 1.97%, comfortably within the central bank’s target range of approximately 2%, with a permissible variance of one percentage point. Consumer prices saw a slight monthly decline of 0.09% in January, a change from a 0.11% increase in December.
The central bank’s statement projected that annual inflation would approach the lower limit of the target range in the near future. Furthermore, it anticipated that core inflation—excluding volatile food and energy prices—would continue to decrease towards the midpoint of the target range.
This decision follows a 25 basis point reduction in early January, which positioned the rate in what the bank termed “neutral territory.” Future adjustments will be based on new data regarding inflation and its derivatives. The statement also acknowledged persistent global uncertainties influenced by trade policies and international conflicts.
Peru’s central bank’s decision to maintain the interest rate at 4.75% indicates stability in a gradually declining trend from earlier highs. The nation’s low inflation rate and expectations of continued moderation in core inflation reflect effective monetary policy, addressing economic uncertainties. This strategic stance underlines a commitment to adapting to evolving financial conditions while aiming for sustainable economic growth.
Original Source: www.tradingview.com
