LIMA May 9 Peru's central bank held its
benchmark interest rate steady at 4.25 percent for
the 24th straight month on Thursday, as inflation runs within
the target range and the economy expands near its potential.
All 11 economists surveyed by Reuters had predicted the
monetary authority would again keep the rate unchanged.
The decision to hold came as inflation in April slowed to
0.25 percent after spiking 0.91 percent in March - the highest
monthly rate for March in years.
Inflation for the 12 months through April was 2.31 percent,
within the central bank's target range of 1 to 3 percent.
"Inflation is expected to converge to the center of the
target range over coming months due to the improvement in food
supply conditions, a rate of productive activity close to its
potential, and inflation expectations anchored within the target
range," the central bank said in a statement.
Peru's potential growth rate, the maximum rate the economy
can expand without provoking excessive inflation, is normally
seen around 6 percent or 6.5 percent.
The economy expanded 4.9 percent in February compared with
the same month a year ago, and 6.3 percent in all of 2012 - one
of the fastest paces in Latin America.
A similar expansion is expected this year, although the
global economy is showing signs of weakness. The central bank
has cut its forecast for the 2013 trade surplus by more than
Mineral exports have traditionally powered Peru's economy,
but growth in Peru in the past few years has been led by strong
domestic demand and loans for everything from cars to new
The central bank has described its current monetary stance
as slightly tighter than neutral. It has repeatedly raised
reserve requirements for banks to discourage speculative capital
inflows as its currency trades around historic highs.