Peru Surprises With No Change

Contrary to market expectations, Peru’s central bank left its monetary policy rate unchanged at 3.00%, citing a small drop in inflation. Morgan Stanley forecast it would tighten by 25bp to 3.25%, a lower hike than the 50bp increase seen in August and September, due to low inflation, which is around 2.0%. Barclays also expected a 25bp hike, with the rate ending at 3.5% by the end of the year. Bank of America Merrill Lynch expected the bank to continue the trend with a 50bp hike.