Peru | BCRP maintains policy rate at 7.75% and shows no signs of cuts coming very soon
Published on Friday, July 14, 2023 | Updated on Friday, July 14, 2023
Peru | BCRP maintains policy rate at 7.75% and shows no signs of cuts coming very soon
Summary
The Board of the Central Bank decided to maintain the monetary policy rate at 7.75% in July. The Bank maintained the monetary policy stance understood as the real ex-ante policy rate at a restrictive level and gives no signal of rate cuts happening soon.
Key points
- Key points:
- The policy rate now stands at 3.92% in real terms (June: 3.54%).
- The Bank remarked that inflation has been affected recently by food supply restrictions in a transitory manner.
- The monetary authority sharpened its inflation forecast: it expects it to get close to the target range (2% +/- 1%) by the end of the year and reach it in the first months of 2024.
- One year ahead inflation expectations decreased from 4.2% in May to 3.8% in June.
- We believe that the first policy rate cut will happen in October most probably, although the Central Bank does not rule out future rate hikes on its announcement yet.
Geographies
- Geography Tags
- Latin America
- Peru
Topics
- Topic Tags
- Central Banks
Authors
Hugo Vega de la Cruz
BBVA Research - Principal Economist