MNI: PBOC Net Injects CNY309 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1880 Weds; -2.54% Y/Y

MNI BRIEF: Japan H’hold Assets at JPY2,179 Trln End-Sept

MNI: JAPAN NOV EXPORTS +3.8% Y/Y; SEPT +3.1%

MNI CNB WATCH: Policy Hold Seen, Cuts To Start In Q1 2025

MNI NBH WATCH: NBH Holds Rates, Tweaks Inflation Outlook

JAPAN DATA: Japan Nov Exports +3.8% Y/Y; Imports -3.8% Y/Y

EZ/UK T-Bill Calendar: 1/3/6-Month UKTB Auction on Friday

EZ/UK Bond Supply Calendar: Austria, UK Auction on Jan 7

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

PERU: BBVA Expects BCRP To Cut To 4.5% Neutral Level By Year-End

PERU
PeruEM BulletBulletGlobalEmerging Market NewsRegion
  • BBVA expects Peruvian GDP to rise by 2.9% this year and 2.7% in 2025. Private spending will gain traction in the coming quarters, supported by more favourable financial conditions, the impact of private pension fund withdrawals and the beginning of construction of some infrastructure projects, while public spending will moderate. Anchored inflation expectations and the absence of demand pressures on prices suggest inflation will remain within the target range in the coming quarters, closing this year around 2.5% and next year at 2.3%.
  • BBVA believes that with inflation under control and the gradual reduction of slack in the economy, the central bank will keep cutting its policy rate for the remainder of this year, reaching 4.50% by year-end. This would bring the policy rate to what they regard as the neutral level, where they expect it to remain in 2025.
  • Considering an interest rate spread around zero in Q4 2024, BBVA foresees that USDPEN will end the year between 3.70 and 3.80. For 2025, they anticipate some strengthening of the PEN, to 3.65-3.75 by year-end, supported by a more favourable interest rate spread and a still high trade surplus, despite uncertainty due to the 2026 domestic electoral process becoming more visible, especially towards the end of that year.
206 words

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
  • BBVA expects Peruvian GDP to rise by 2.9% this year and 2.7% in 2025. Private spending will gain traction in the coming quarters, supported by more favourable financial conditions, the impact of private pension fund withdrawals and the beginning of construction of some infrastructure projects, while public spending will moderate. Anchored inflation expectations and the absence of demand pressures on prices suggest inflation will remain within the target range in the coming quarters, closing this year around 2.5% and next year at 2.3%.
  • BBVA believes that with inflation under control and the gradual reduction of slack in the economy, the central bank will keep cutting its policy rate for the remainder of this year, reaching 4.50% by year-end. This would bring the policy rate to what they regard as the neutral level, where they expect it to remain in 2025.
  • Considering an interest rate spread around zero in Q4 2024, BBVA foresees that USDPEN will end the year between 3.70 and 3.80. For 2025, they anticipate some strengthening of the PEN, to 3.65-3.75 by year-end, supported by a more favourable interest rate spread and a still high trade surplus, despite uncertainty due to the 2026 domestic electoral process becoming more visible, especially towards the end of that year.