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Scotiabank Say BCRP Needs To Sound Tough To Avoid Premature Easing Speculation

PERU
  • Scotiabank have noted that Peru's central bank is widely expected to hold its policy reference rate unchanged at 7.75% for a sixth consecutive meeting on Thursday evening. Guidance provided at the prior meeting in June kept the door open to further tightening if needed and hence leaned against nearer term easing expectations. Since that meeting, headline inflation unexpectedly fell in month-over-month terms and has been running at closer to seasonal norms over recent months. Like other central banks, it needs to sound tough in order to lean against market tendencies to prematurely price in easing expectations.

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