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PERU: JP Morgan Expect 25bp BCRP Rate Cut On Thursday

PERU
PeruEM BulletBulletGlobalEmerging Market NewsRegion
  • JP Morgan maintain their call for the BCRP to continue easing monetary conditions this week, cutting the policy rate by 25bp to 5.0%. In their central scenario, the policy rate converges to 4.5% by year-end, with a terminal level of 4.0% by Q2 2025.
  • The downward surprise in September CPI led annual inflation to plunge below the 2% target, to 1.78% y/y. JPM notes that the main reason for both the monthly deflation and forecast miss was food prices, which collapsed by 0.97%m/m, and contributed -24bp to headline CPI variation on the month.
  • As relevant from a monetary policy standpoint, core inflation recorded no change on the month, with the annual rate converging to 2.64% y/y. Similar to headline CPI, when adjusting for seasonality, the 3-month average ran at a 0.83% annualised pace, below the 1-3% policy target range floor.
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  • JP Morgan maintain their call for the BCRP to continue easing monetary conditions this week, cutting the policy rate by 25bp to 5.0%. In their central scenario, the policy rate converges to 4.5% by year-end, with a terminal level of 4.0% by Q2 2025.
  • The downward surprise in September CPI led annual inflation to plunge below the 2% target, to 1.78% y/y. JPM notes that the main reason for both the monthly deflation and forecast miss was food prices, which collapsed by 0.97%m/m, and contributed -24bp to headline CPI variation on the month.
  • As relevant from a monetary policy standpoint, core inflation recorded no change on the month, with the annual rate converging to 2.64% y/y. Similar to headline CPI, when adjusting for seasonality, the 3-month average ran at a 0.83% annualised pace, below the 1-3% policy target range floor.