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Central Bank Decision In Focus – 0000BST/1900ET

PERU
  • The focus in Peru is on today’s BCRP decision where the central bank is expected to raise its key rate by 25bps to 7.00%, according to all 12 economists surveyed by Bloomberg.
  • Despite Lima CPI moderating in August to 8.4% from 8.74%, the September monthly reading of +0.52% was above median consensus, prompting the annual rate to jump once again to 8.53%.
  • August 12-month ahead inflation expectations continued to dip, albeit at a slower pace of just 6 basis points to 5.10%.
  • Activity declined 0.8% M/m in July. Mining and manufacturing were the main drags with construction also contributing. Services partially offset the decline. Activity is close to potential and pension savings withdrawals should provide some support in H2. Additional data released since the September meeting indicated higher a unemployment rate (7.3% from 6.8% in July).
  • The BCRP is widely considered to be entering the late fine-tuning stage of its hiking cycle. Some analyst views for this meeting will be recirculated throughout today’s session.

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