LIMA, March 7 Peru's central bank held its
benchmark interest rate steady on Thursday at 4.25
percent for the 22nd straight month as inflation runs within its
target range even as the economy hurtles along at a 6 percent
All 10 economists surveyed by Reuters had predicted the
monetary authority would once again keep the rate unchanged.
Consumer prices in February fell 0.09 percent - putting
annual inflation at 2.45 percent, within the central bank's
target range of 1 percent to 3 percent.
"It is projected that inflation will converge to 2 percent
in coming months, thanks to better supply conditions for food
and productive activity close to its potential, against a
backdrop of ongoing weak global production indicators," the
central bank said in a statement.
The economy grew 6.3 percent in all of 2012 - one of the
fastest paces in the region - as strong domestic demand and
construction activity offset weaker exports.
A similar pace is expected this year.
Peru's potential growth rate, the maximum rate that the
economy can expand without provoking excessive inflation, is
normally seen around 6 percent or 6.5 percent.
"Some current and preliminary indicators show growth in
Peru's economy has stabilized near its sustainable long-term
rate, though indicators linked to external markets are still
weak," the statement said.
The central bank has described its current monetary stance
as slightly tighter than neutral. It has raised bank reserve
requirements several times to discourage speculative capital
inflows as its currency trades around historic highs and to slow
a rapid credit expansion.