Peru Keeps Rates at Record Low

As expected, Peru has held its benchmark lending rate at the record low of 1.25% for another month. “Leading economic indicators show clear signs of recovery and dynamism, without causing any short-term inflationary pressures,” the central bank says in a statement. February inflation was 0.3%, it notes. “The board is paying attention to inflation and its causes and will adopt, if necessary, preventative adjustments in monetary policy to guarantee that inflation stays within the target range.” Credit Suisse expects the central bank to leave the policy rate unchanged at the historically low level of 1.25% until mid-2010, as inflationary pressures remain low. “The central bank will likely continue intervening in the FX market as long as dollar inflows remain high,” it adds.