Publications

The article contrasts the Peruvian institutional instability with the solidity of the Central Reserve Bank under Julio Velarde. Given his possible succession, the urgency of preserving monetary autonomy and the technical training of its staff to avoid future crises is emphasized.

The Central Reserve Bank of Peru maintained the interest rate at 4.25%, in line with expectations. Despite the inflationary rebound in March caused by supply shocks, the institution projects that inflation will return to the target range by the end of this year amid positive growth prospects.

Europe is seeking to strengthen the international role of the euro in the face of the U.S. dollar’s dominance in order to achieve greater geopolitical autonomy. The success of this challenge requires economic weight, institutional strength, and technological and financial innovation.

Inflation in Lima Metropolitana registered a historical increase of 2.38% month-over-month in March. This increase, the largest in 32 years, raised the year-over-year rate to 3.8%, surpassing the upper limit of the Central Bank's target range due to climate and energy factors.

For a second straight meeting, the Fed held rates steady last week at a 3.50-3.75% target range, flagging renewed inflation risks tied to the Middle East conflict—now priced in by markets through higher medium- and long-term yields.

Looking ahead, we think the timing of the final rate cut will depend on external conditions. Under our baseline of a short-lived conflict, and with Banxico’s test for second-round effects from this year’s fiscal changes now met, most Board members may prefer to wrap up the easing cycle and deliver a final 25bp cut in May.

If inflation expectations remain well anchored, a pause driven by a supply-driven shock could prove counterproductive given policy lags, potentially leaving the stance tighter than desired once these pressures dissipate.