off-the-wire

UPDATE 1-Peru central bank expects inflation to continue slowing

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds central bank forecasts for economic growth, comments on interest rate, context on economy) LIMA, April 14 (Reuters) - Peru's central bank on Friday projected that annual inflation will continue to trend downward in the coming months, with a return to the bank's target range in the fourth quarter of 2023, and warned first quarter economic growth would be "null." The comments come after the central bank kept unchanged its benchmark interest rate at 7.75% on Thursday for the third consecutive time, as the monetary authority in the Andean nation faces the highest inflation in a quarter century. Peru's annual inflation rate slowed to 8.40% in March, and the central bank said Friday it expects the rate to fall below 8% in April.


The central bank noted "transitory effects" on inflation due to supply issues for some food products as well as the impact of heavy rains in the past month.


Thursday's decision to keep the rate steady "does not necessarily mean the end of the interest rate hiking cycle," the bank said, repeating previous guidance.


Peru's economy likely contracted slightly in February, the central bank said, with growth for the first quarter expected to be "null." One of the region's fastest growing economies in recent years, the Peruvian economy was stunted by nationwide protests that began in December following the ouster and arrest of former President Pedro Castillo, as well as by


heavy rainfall that caused over $300 million in damages.
(Reporting by Marco Aquino and Brendan O'Boyle; Editing by Jonathan Oatis and Anthony Esposito)

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