Peru | Key rate on hold in February, with no major news in the communiqué that accompanied the decision

The Central Bank decided to keep the policy rate at 3,25%, as we anticipated. The high exchange rate volatility in February, and especially in recent days, led us to believe that the Central Bank would opt to keep the rate on hold, thus avoiding feeding depreciation pressures on the local currency. This factor would tip the decision even though output remains weak and the inflation outlook for the coming months is more benign. Going forward, these two elements imply that we cannot rule out an eventual monetary policy rate easing in the short term, depending on the volatility of the exchange rate in the days before the Board meets.

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