Peru to Keep Rates Unchanged

Market consensus is that Peru’s central bank will keep the monetary policy rate at 1.25% today. Morgan Stanley continues to expect the bank will keep the policy interest rate on hold at 1.25% and expects monetary tightening during the second half of this year. Bank of America Merrill Lynch agrees that the rate will stay at 1.25% until the second half of 2010. It expects annual inflation to increase to 1.5% by the end of 2010 from 0.1% at the end of 2009.