Lower interest rate does not ensure the country's growth, says Central Bank of Peru

The Central Reserve Bank of Peru maintains the interest rate at 5.75% after two reductions

The Central Reserve Bank of Peru maintained its interest rate at 5.75% on Thursday, a pause after two consecutive declines, while core inflation shows some persistence associated with the services sector.

Peru's inflation rate slowed in May, when prices fell 0.09%, to bring the year-on-year inflation rate to 2.0%placing it at the midpoint of the central bank's 1% to 3% target range for the first time since 2021.

The local monetary authority stated that in May most of the indicators of the Peruvian economy recovered, while “most indicators of expectations about economic activity are in the optimistic range”he pointed.

Regarding the global economy, which the Peruvian entity also takes into account to define its interest rate, The bank stressed that the outlook points towards moderate growth in a context of lower inflationary pressures.

However, volatility persists in financial markets associated with uncertainty about the rate of reduction of monetary policy interest rates in advanced economies, and the risks derived from international conflicts also remain.“, he stated.

The bank reaffirmed that it will be attentive to new information regarding local inflation, including the evolution of the underlying rate, and considers whether “additional modifications in the monetary policy position” are necessary.

Peru, one of the world's three largest copper producers, It expects to record economic growth of 3.1% in 2024, after suffering a recession last year with a drop of 0.6%.