LIMA, Sept 12 Peru's central bank kept its
benchmark interest rate steady at 4.25 percent for
the 28th straight month on Thursday, as the economy expands near
its potential and inflation is expected to cool in coming
All 14 economists surveyed by Reuters had predicted the
central bank would keep the rate steady.
The decision to hold came as the economy this year has
expanded more slowly than expected, and annual inflation runs at
a slightly higher than targeted 3.28 percent.
The central bank said it expected inflation to slow to
within its 1 to 3 percent target range in the third quarter.
Peru has enjoyed a mining-fueled economic boom over the past
decade, but weak demand from buyers like China and lower mineral
prices have slowed growth this year. The government and central
bank now expect a 2013 trade deficit, instead of a surplus - the
first gap since 2001.
The central bank appeared slightly more optimistic about
global economic growth on Thursday than in previous months.
"Current and preliminary indicators of productive activity
show Peruvian economic growth close to its long-term sustainable
level, while indicators linked to the external market showed a
slight recovery, which has favorably affected the prices of
export products," the central bank said in its statement.
The economy expanded 4.4 percent in June, compared with the
same month in 2012. Data for July will be released on Monday.
The central bank said that if needed, it would further
loosen reserve requirements on banks as it has in recent months
to encourage lending.
Last year, the economy grew at a 6.3 percent clip - one of
the fastest rates in the region.
The central bank has trimmed its forecast for 2013 economic
growth to between 5.5 and 6 percent from its previous estimate
of 6.1 percent.
Peru's potential growth rate, the maximum rate the economy
can expand without provoking excessive inflation, is normally
seen at around 6 percent or 6.5 percent.