Peru Expected to Tighten Rate

Peru’s central bank is expected to tighten its monetary policy rate by 25bp, increasing it to 2.25% today. “With economic growth significantly above potential and no signs of slowing yet, we expect the authorities to continue tightening monetary policy,” says Morgan Stanley. Peru’s central bank began hiking the rate in May, when it tightened it by 25bp to 1.50%. It has increased the rate by 25bp every month since then. Barclays Capital also believes there will be a 25bp hike, but cautions that a 50bp is also possible, citing strong growth in line with that previous to the global recession.