Peru’s central bank maintained its key interest rate at 4.75%, assessing the impact of global trade wars. While domestic inflation remains low, concerns arise over external economic risks. The bank anticipates continued economic growth, as officials prepare to protect key exports from potential tariffs.
Peru’s central bank decided to maintain its key interest rate at 4.75% as policymakers assess the potential inflationary effects stemming from global trade conflicts. This decision aligned with the expectations of seven of the eleven economists surveyed by Bloomberg, while the remaining four anticipated a reduction to 4.5%. The bank acknowledged positive domestic inflation trends but expressed concerns over increasing global economic risks attributed to trade restrictions.
In its statement, the central bank referred to observed “high volatility in financial markets” as a notable concern. While Peru boasts one of the lowest inflation rates among emerging markets and has experienced growth exceeding that of regional counterparts, authorities are wary of the repercussions of U.S. President Donald Trump’s trade policies, especially regarding exports of metals and fruits.
Peru’s annual inflation rate eased to 1.5% in February, with forecasts suggesting it may drop to about 1% in March. The central bank also projects an economic growth rate of 3% for this year. Energy and Mines Minister Jorge Montero announced that a delegation would be sent to negotiate against potential tariffs on copper exports. Agriculture Minister Angel Manero commented on the unlikelihood of U.S. tariffs affecting Peruvian crops, while also noting readiness to appeal to the World Trade Organization if necessary.
In summary, Peru’s decision to hold interest rates steady at 4.75% reflects a cautious approach amid global trade uncertainties. The central bank’s focus on monitoring inflation trends is crucial as it anticipates economic growth of 3%. Key policymakers are also taking measures to protect Peruvian exports against potential U.S. tariffs, highlighting the importance of international trade relations for the country’s economic stability.
Original Source: www.livemint.com
