The Central Reserve Bank of Peru (BCRP) raised the benchmark interest rate by 50 basis points to 3.50% amid soaring prices in the country.
According to the monetary authority, the decision took into account the increase in inflation at an annual rate of 5.68% in January, “temporarily” above the target of 2%, in addition to the devaluation of the Peruvian sol, the local currency.
In a statement, the BCRP forecasts that inflation will return to target in the fourth quarter as “transient” pressures ease despite spiraling energy prices. The institution assesses that economic indicators in the country were in “pessimistic territory” in January.
“Global economic activity is improving, albeit at a slower pace due to the impact of Covid-19, persistent bottlenecks in the global supply of goods and services, and uncertainty in the pace of reversal of monetary stimulus in advanced economies”, highlights the entity.
Source: CNN Brasil
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