Published on Friday, January 13, 2023 | Updated on Friday, January 13, 2023

Peru | BCRP extends monetary adjustment in a context of persistent supply shocks

The Board of the Central Bank decided to increase the monetary policy rate from 7.50% to 7.75% in January. The Bank tightened the monetary policy stance understood as the real ex-ante policy rate to a more restrictive level.

Key points

  • Key points:
  • The policy rate increased by 25 basis points again and now stands at 3.45% in real terms (December: 2.82%).
  • The Bank explained that the higher inflation observed in December is a result of the increase in the price of locally produced foodstuffs.
  • The monetary authority maintained its inflation forecast and expects it to return to the target range (2% +/- 1%) in the fourth quarter of next year.
  • One year ahead inflation expectations decreased from 4.7% to 4.3% in December while those for the end of 2023 decreased from 4.4% to 4.3%.
  • We do not rule out an additional adjustment to the reference rate given the higher inflation observed in December and the possibility it will increase further in January.

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