Hike Expected for Peru Rate

Market consensus points to an expected 25bp hike in Peru’s policy rate, increasing it to 4.00%. Morgan Stanley says that the central bank will have to continue tightening rates to contain inflation. It expects the rate to reach 5.50% by the end of the year. Barclays, however, expects a 50bp hike, saying that strong domestic growth –of around 10% year over year in February- gives the central bank room for more aggressive tightening.