Peru Seen Holding on Rates

Last Friday’s lower than expected inflation reading leads analysts to predict no change at Peru’s Thursday monetary policy meeting. “The central bank will most likely keep the reference interest rate unchanged (at 5.25%) in its next monthly monetary policy meeting,” says Goldman. Peru has already increased rates by 75bp since July 2007 and raised bank reserve requirements last month, so it may want to take time to assess the effects of those tightening moves before moving again, it adds. The government also wants to avoid further sol appreciation.