Peru | BCRP hikes monetary policy rate given the deterioration of the inflation panorama

The Board of the Central Bank decided to increase the monetary policy rate by 0,25% to 0,50% in August. The Bank maintains an expansive stance but will pay special attention to inflation expectations to consider modifications to the policy stance.

Key points

• Key points:
• The monetary authority pointed out that the higher inflation observed in July is a result of transitory supply factors such as the increase in the international price of food inputs and fuels, coupled with a higher exchange rate.
• The monetary authority stated that it expects inflation to return to the target range (2% +/- 1%) in the next twelve months and remain inside the range during the rest of 2022.
• The monetary authority seems to opt for transmitting signs of moderation to the market given the recent strong increase in inflation expectations.

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