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MNI Peru Central Bank Preview – June 2024: Headline CPI Returns To Target

MNI BCRP Preview: June 2024

MNI BCRP Preview: June 2024

Executive Summary

  • The majority of analysts expect the BCRP to cut the reference rate by 25bp to 5.50%.
  • Another softer-than-expected inflation reading in May brought the annual rate of CPI inflation back to the BCRP’s 2% target, which along with a still weak growth backdrop, supports the case for further policy easing.
  • Declining interest rate differentials between the BCRP and the Federal Reserve remain a risk to the currency, but BCRP Governor Velarde seems comfortable with the further narrowing of this spread for now.
  • Nonetheless, a small minority of analysts expect the BCRP to pause the easing cycle and potentially cut reserve requirements instead.

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