FX.co ★ Peru Leaves Interest Rate Steady at 4.50%

In August, the Central Reserve Bank of Peru opted to maintain its benchmark interest rate at 4.50%, indicating that any future rate adjustments will be contingent upon forthcoming inflation data and its primary influences. In the preceding month, July, inflation saw a modest rise of 0.23%, with core inflation inching up by 0.18%. These figures kept both annual inflation rates steady at 1.7%. Notably, inflation expectations for the upcoming year have eased to 2.2%, comfortably within the bank's target range. The Central Bank anticipates that inflation will hover near the lower end of its target in the near term before stabilizing towards the midpoint. Economic activity and sentiment indicators for July showed significant improvement, with most metrics reflecting optimism, despite a backdrop of deteriorated global growth outlook due to trade restrictions and market volatility. The bank reiterated its commitment to take action if necessary, maintaining auxiliary policy rates, notably 2.50% for overnight deposits and 5.00% for specific monetary regulation credit operations.