Peru | BCRP hikes the monetary policy rate and changes to a slightly less hawkish tone

The Board of the Central Bank decided to increase the monetary policy rate from 3,00% to 3,50% in February. The Bank removed the forward guidance component that signalled further hikes.

Key points

• Key points:
• The policy rate increased by 50 basis points for the sixth time in a row.
• The Bank reiterated that the higher inflation observed in January 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 maintains its expectation that inflation will return to the target range (2% +/- 1%) in the fourth quarter of the year.
• We expect the Central Bank to continue hiking, taking the reference rate to 4.50% in the second quarter.

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