Peru Tightens Rate

Peru’s central bank has tightened its rate by 25bp to 4.0%, in line with market expectations. The bank cites the increasing inflation expectations and fast growth in the domestic economy as reasons for the hike. However, some shops forecasted a higher hike. Barclays expected a 50bp hike, as it believed strong domestic growth –of around 10% year over year in February- gives the central bank room for more aggressive tightening. Citi also expected a 50bp hike.