The last time he reduced it was in January this year, also at 25 basic points, from 5% to 4.75%, why did he cut it again?
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The interest rate is close to the estimated level as neutral, argues the issuing entity. “Future adjustments in the reference rate will be conditioned to the new information about inflation and its determinants”he adds.
(Photo: GEC)
In April, the current situation indicators and expectations about the country’s economic activity showed a slight deterioration with respect to the previous month, says the monetary authority. However, most indicators were maintained in the optimistic section, in a context in which economic activity is located around its potential level, he says.
Jorge Chávez, president of the consultant Maximixe, questioned the decision of the BCRP. He considered that economic activity in the country is favored by an international context of high gold prices, when the metal is erected in an active refuge for uncertainty about the commercial policy of the United States. In addition, copper contribution will also be expected to rise through the planned demand, he added.
With the decision of the BCRP, its reference rate is at the same level as that of the Fed (4.25%-4.5%). According to Chávez, this could generate a lower influx of capital towards the local market, because before the same performance, they would prefer to go to the developed country (United States) instead of emerging (Peru).
“These capitals are short -term, or called swallows, come and go (from one market to another)”the analyst said.
-However, executives of the financial system consider that although it is uncommon for this parity between both rates, its effects on the flow of short -term capitals that enter the country would be limited taking into account the favorable foundations of their economy, mainly, the high surplus of commercial balance.
In April, the monthly rate of inflation It was 0.32% and inflation without food and energy (underlying) was 0.14%points out the Central Bank. Thus, as expected by the BCRP, the 12 -month inflation rate went from 1.3% in March 1.7% in April, within the target range.
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On the external scenario, The monetary authority warns that inflation expectations in several of the main economies, particularly in the US, have been influenced by the increase in commercial tensions. In this context, he considers that the expected convergence of inflation towards his goal could be slower than expected.
“The prospects for world economic activity have deteriorated as a result of restrictive measures to foreign trade, with a downward bias due to high uncertainty about its effects on the global economy. In this context, volatility is maintained in financial markets”he said.
Julio Velarde, president of the BCRP. | Photo: GEC
The BCRP projects that inflation returns in the coming months to levels near the center of the target range (2%). It also estimates that underlying inflation will remain around 2% on the projection horizon.
