The board of the Central Bank of Peru (BCRP) has decided to raise the country’s key interest rate by 25 basis points to 7 percent in October, the central bank said Thursday.
A statement said it considered that the 12-month inflation rate rose to 8.53 percent in September from 8.40 percent in August, above the target range, due to the “significant increase” in international food and fuel prices.
Meanwhile, it added that the 12-month inflation rate for non-food and energy rose to 5.51 percent in September from 5.39 percent in August, above the upper limit of the inflation target.
“The substantial increase in international energy and food prices since the second half of last year, exacerbated by international conflicts, has led to a sharp rise in global inflation rates not seen for many years,” the report said.
However, the BCRP said a downward trend in annual inflation is forecast, with a return to the target range in the second half of next year due to “the weakening of the impact of international prices” and a reduction in inflation expectations.
It noted that 12-month inflation expectations fell from 5.10 to 4.89 percent between August and September, still above the upper bound of the inflation target range.
The BCRP said its board is paying particular attention to new information on inflation and its determinants, including developments in inflation expectations and economic activity, “to consider further changes in the stance of monetary policy.”
It also reiterated its commitment to take the necessary measures to ensure the return of inflation to the target range over the projection horizon while announcing that the following assessment of the monetary policy program is scheduled for November 10.
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