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Central Bank Preview - 00:00BST / 1900ET (1/2)

PERU

PERU Central Bank Preview – 00:00BST/1900ET

  • The central bank is likely to hold the monetary policy interest rate at 0.25%. Communication is expected to remain dovish, with inflation waning and price expectations well anchored.
  • Potential Marginally Hawkish Scenario:
    • The MPC have the potential to strengthen their language given financial stability concerns. Heightened political uncertainty relating to the June run-off have caused significant escalation in asset price volatility.
    • As markets increased bets on leftist candidate Pedro Castillo winning the June run-off, capital outflows as well as the rapid depreciation of PEN could signify what may be in store following the second-round result.
    • Perhaps too early at this meeting, but the risk of the central bank having to act to contain these pressures is being cited among sell-side commentary.

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