bet360备用网址

Peru Monetary Policy March 2020

Peru

Peru: Central Bank holds its ground in March despite heightened coronavirus-related risks

March 13, 2020

At its monetary policy meeting on 12 March, the Central Bank of Peru (BCRP) held the policy interest rate steady at 2.25%, the lowest point since July 2010, although it singled out the spread of coronavirus (Covid-19) as the main risk to global economic activity. The Bank last cut the key rate by 25 basis points in November, the second of the two cuts delivered last year.

Within-target inflation, a further decline in inflation expectations and firming albeit still-modest economic activity led the Bank to stand pat. Inflation was stable at January’s 1.9% in February, thus remaining below the midpoint of the Central Bank’s target range of 1.0%–3.0%. Meanwhile, economic activity seemingly gained steam in January-February on the back of soaring public capital spending, following a notable slowdown in Q4; however, faltering business confidence and spillovers from Covid-19 suggest the economy is poised to gain only limited traction in the first quarter of this year.

The Bank did not provide any strong forward guidance in the accompanying press release. That said, monetary policy will likely remain expansionary and further rate cuts cannot be ruled out going forward. Inflation is projected to remain close to the midpoint of the target band and risks stemming from weaker-than-expected domestic and external demand are tilted to the downside, further easing could be required. In the event economic activity is significantly hit by the current global health emergency, output gap will not be reduced at the pace expected by the Bank and inflation could deliver downside surprises, prompting the BCRP to take action.

bet360备用网址 The next monetary policy meeting will be held on 16 April.

The FocusEconomics panel sees the monetary policy rate ending 2020 at 2.13% and 2021 at 2.75%.


Author: Massimo Bassetti, Economist
bet360备用网址

Sample Report

Looking for forecasts related to Monetary Policy in Peru? Download a sample report now.

Download

Peru Monetary Policy Chart


Peru Monetary Policy March 20 20 0

Note: Central Bank Reference Rate in %.
Source: Peru Central Bank (BCRP).


Peru Economic News

  • Peru: Economic activity improves at 2020 outset

    March 16, 2020

    bet360备用网址In January, economic activity grew a 3.0% year-on-year, accelerating significantly from December’s subdued 1.2% outturn and surprising market expectations on the upside.

    Read more

  • Peru: Business sentiment weakens in February

    March 6, 2020

    bet360备用网址The business confidence indicator dropped from January’s 52.9 points to 48 points in February.

    Read more

  • Peru: Inflation stable in February

    March 6, 2020

    bet360备用网址Consumer prices in Metropolitan Lima rose 0.14% over the previous month in February, up from January’s 0.05% increase.

    Read more

  • Peru: Exports fall back at 2020 outset

    March 6, 2020

    Peru’s trade balance recorded a USD 283 million surplus in January, smaller than December’s USD 1.2 billion surplus and the USD 479 million surplus recorded in the same month last year. Exports dipped 1.6% year-on-year in January (December: +6.6% year-on-year), weighed down by falling foreign sales of fishing, textiles and agricultural products, only partially offset by rising exports mining products.

    Read more

More news

Search form