The trend of the central bank to raise interest rates due to a surge in inflation continues. Recently, Peru's central bank raised its benchmark interest rate by 50 basis points to 5.5% for the eleventh consecutive increase.
Citing Reuters (10/6), the copper-producing country is struggling with very high inflation. Prices rose more slowly in May compared to the previous two months, but annual inflation still stood at 8.09%, the highest level in 24 years.
In the current cycle of monetary policy tightening, Peru's central bank has raised its key interest rate by 525 basis points since mid-2021. The latest decision follows this week's rate hikes in Brazil, Chile and Mexico, as authorities respond to inflation not falling as quickly as expected.
In a statement, the bank repeated guidance from last month that it expects annual inflation to start falling in July.
"Most of the leading indicators and expectations about the economy remain pessimistic, but they have recovered in May," Peru's central bank said.
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