Central Bank of Peru Holds Interest Rate at 4.25%

The Central Reserve Bank of Peru kept its monetary policy reference rate steady at 4.25%.  The Bank said: "This decision takes into account the lower growth being recorded by some components of expenditure, the current international financial risks, and the rise of inflation associated mainly with temporary supply factors. Future adjustments in the reference interest rate will depend on the evolution of inflation and its determinants."

Peru's central bank also held the interest rate at 4.25% at its November meeting, while the bank last raised the monetary policy reference rate by 25 basis points to 4.25% in May last year.  Peru reported annual inflation of 4.74% in December, up from 4.2% in October, up from 3.73% in September, 3.35% in August and July, and compared to 2.9% in June, 3.07% in May, 3.34% in April, and above the Bank's 1-3% inflation target.  

The Bank's next Monetary Policy meeting will be held on the 9th of February 2012.  The Peruvian Nuevo Sol (PEN) last traded around 2.70 against the US dollar, with the PEN gaining approx. 3.5% over the past year.

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