Peru Rates Stay Put

In line with market consensus, Peru’s central bank kept its monetary policy rate unchanged at 1.25%, saying inflation, at an annualized rate of 0.44% in January, is below the 1.00% target. Morgan Stanley expects monetary tightening during the second half. Bank of America Merrill Lynch agrees that the rate will stay at 1.25% until H2. It expects annualized inflation to increase to 1.5% by the end of 2010.