Central Bank of Peru cuts interest rate to 6%

The Central Reserve Bank of Peru reduced its key interest rate this Thursday by a quarter of a percentage point (0.25 points) to place it at 6.0 percent, returning to cuts after an impasse the previous month, while the entity hopes that inflation annual continues its downward trend.

Analysts consulted by Reuters expected the monetary authority to keep the interest rate stable, with this cut the rate is now at July 2022 levels.

“Interannual inflation is projected to continue its downward trend and gradually converge to the center of the target range in the coming months,” the entity said in a statement.

The board also stressed that it will remain attentive to the evolution of prices and economic activity in the Andean country to “consider, if necessary, additional modifications in the monetary policy position.”

The Peruvian economy, one of the largest copper producers in the world, would have grown between 2 and 3 percent in February, according to the Minister of Economy, after closing 2023 with a contraction of 0.55 percent.

Inflation, for its part, slowed in March, reaching 3.05 percent annually, from 3.29 percent previously, but still slightly above the central bank’s target range of between one and 3 percent.

Among other factors that it took into account for the decision, the bank mentioned the good global economic expectations, but pointed to “the risks in fuel and freight prices derived from international conflicts,” amid concern about an expansion of the conflict. in the Middle East.

In its previous meeting, the monetary entity had maintained the rate at 6.25 percent, marking the first pause in its reductions in more than half a year.