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Peru Central Bank – Analyst Views

PERU
  • *Goldman Sachs: The MPC decision to hold-and-monitor was informed by an assessment that the recent forces driving inflation up are either: (1) temporary in nature (i.e. inflation strained by temporary disruptions to the agriculture sector), or (2) still-expected to visibly moderate in March (a recurring theme in previous meetings).
    • Although the relatively hawkish forward guidance suggests that the MPC may be open to resuming tightening if necessary, GS believe this is a less likely scenario than holding the policy rate at the current level in upcoming meetings. In their assessment, the MPC will be patient and will maintain a restrictive monetary policy stance at least through the start of 2H2023.
  • *JPMorgan: Unless inflation expectations continue to move higher in coming months, the policy rate is expected stable through the end of 2Q23. By then, JPM expect the pre-conditions required to reduce the real ex-ante rate to be fulfilled, offering the BCRP the possibility to ease monetary conditions by June (-50bp). The policy rate is expected to converge to 5.5% by December 2023, and 4.0% by 2Q24.
  • *BBVA: Base scenario is that the monetary pause will continue in the coming months, before a normalization process of the reference interest rate begins in the second semester of the year when the decrease of inflation will be clearer.
    • In a risk scenario, which would materialize, for example, if the recent social events have a more pronounced and sustained impact on prices or if the lagged effect of the drought in the last months of 2022 is greater than expected for food supplies, the BCRP would resume the monetary adjustment, something that the statement does not rule out could occur.
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