The board of the Central Reserve Bank of Peru (BCRP) raised this Thursday, July 7, the reference interest rate to 6.0% as part of the normalization of monetary policy. This is the highest rate since March 2009.
For the new readjustment, they considered that the twelve-month inflation rate increased from 8.09% in May to 8.81% in June, being above the target range due to the resurgence of significant increases in the international prices of food supplies and fuels. .
Meanwhile, the twelve-month inflation rate excluding food and energy also rose from 4.26% in May to 4.95% in June, above the upper limit of the inflation target range.
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The monetary authority indicated that the significant increase in international energy and food prices since the second half of last year, recently accentuated by international conflicts, has led to a sharp increase in global inflation rates in magnitudes not seen in many years in advanced economies and in the region.
With this, the BCRP projects that inflation will return to the target range between the second and third quarters of next year, as it expects the downward path of year-on-year inflation to begin in July of this year, due to the moderation of the effect of prices. international food and energy markets and an economy still below its potential level.
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It is explained that most of the leading indicators and expectations about the economy deteriorated in June and remain in the pessimistic range.
While world economic activity has been recovering at a slower rate due to the persistence of bottlenecks in the global supply of goods and services, the reversal of monetary stimuli in advanced economies, the confinement measures in China and international conflicts .
Finally, the entity reported that the next session of the Board in which the Monetary Program will be evaluated is scheduled for Thursday, August 11, 2022.
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