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Published on Friday, November 11, 2022 | Updated on Friday, November 11, 2022

Peru | BCRP tightens the policy stance again, end of the hiking cycle?

Summary

The Board of the Central Bank decided to increase the monetary policy rate from 7.00% to 7.25% in November. The Bank tightened the monetary policy stance understood as the real ex-ante policy rate to a slightly more restrictive level.

Key points

  • Key points:
  • The policy rate increased by 25 basis points again and now stands at 2.47% in real terms (October: 2.11%).
  • The Bank explained that the higher inflation observed in October is a result of the increase in the international price of food inputs and fuels.
  • The monetary authority maintained its inflation forecast and expects it to return to the target range (2% +/- 1%) in the second semester of next year.
  • Inflation expectations decreased from 4.9% to 4.8% in October.
  • We maintain that additional adjustments to the reference rate will be decided on a meeting-by-meeting basis and be highly dependent on the speed of descent of inflation and its expectations. We do not rule out any additional adjustment to the reference rate.

Geographies

  • Geography Tags
  • Peru

Topics

Documents and files

Note (PDF)

Nota-de-politica-monetaria_20221110.pdf

Spanish - November 11, 2022

Authors

HV
Hugo Vega de la Cruz BBVA Research - Principal Economist
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