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BCRP Hike Rates and Retain Hawkish Stance

  • The Peruvian central bank overnight raised rates by 50bps to 5.00% - alongside expectations. The bank cited a “significant increase in the prices of energy and food since the second half of last year”. Today, the bank’s chief economist Armas is to hold a press conference at 12pm local time (1800BST/1300ET) to explain the bank’s move.
  • On the decision, Morgan Stanley write that the BCRP kept the hawkish tone from the previous statement and the bank continued to highlight that "if necessary, they would deliver additional changes to the monetary policy stance".
  • They also note the weaker output gap in Peru, relative to other hawkish central bank peers in the region, suggesting a bit more of a “speed limit” on hikes for the BCRP. They see pressure on core items in Peruvian inflation will continue, but don’t think the BCRP will accelerate the pace at this moment, due to the still-wide negative output gap.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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