INSUBCONTINENT EXCLUSIVE:
The Central Reserve Bank of Peru (BCRP) cut its benchmark interest rate by 25 basis points to 4.75%
This decision brings the rate closer to what the bank considers a neutral level
The BCRP announced this move in its January 2025 monetary program report.The bank stated that future rate adjustments would depend on new
inflation data and its determinants
Several factors influenced this rate reduction
In December, the monthly inflation rate grew by only 0.11%
Core inflation, which excludes food and energy prices, increased by a mere 0.40%.The 12-month inflation rate fell from 2.3% to 2% in
Inflation expectations for the next 12 months remained slightly below 2.50%, within the target range
(Photo Internet reproduction)Most economic activity indicators worsened last month
However, they remained optimistic, as seen in recent months
This suggests that economic activity continues to grow around its potential rate
inflation expectations, and economic activity
The BCRP will consider this information for potential monetary policy adjustments
It seeks to stimulate the economy without compromising inflation targets
This move may encourage borrowing and investment, potentially boosting economic activity in Peru.However, the effectiveness of this rate cut
depends on various external factors
These include global economic conditions, commodity prices, and domestic political stability
continue to monitor economic indicators closely
This proactive approach aims to navigate the challenges of the current economic landscape.
