Peru to Keep Tightening

Barclays believes Peru’s central bank will hike the policy rate 25bp to 1.75% today and to 3.00% by year-end. It previously expected no hike this month and the rate ending within a 2.25%-2.50% range this year. Morgan Stanley, meanwhile, thinks the rate will end 2010 at 3.25%. In addition, it revised GDP growth forecasts for 2010 to 7.0% from 4.9%. In 2011, it now believes GDP will grow 6.4%, up from a previous forecast of 5.5%.