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LIMA, June 12 Peru's central bank kept its
benchmark interest rate unchanged at 4 percent for
the seventh month in a row on Thursday, describing slowing
economic growth as "temporary."
All 14 foreign and local economists polled by Reuters this
week said the bank would again hold the rate steady.
While weaker mineral exports have dragged down Peru's
economic growth from rates topping 6 percent, the central bank
said it did not foresee a prolonged slowdown.
"Current and preliminary indicators show a temporary
weakening of economic activity, with gross domestic product
growth rates under their potential, mainly due to slower growth
in investment and exports," the bank said in a statement.
The bank views Peru's potential growth rate, the pace at
which the economy can grow without stoking inflation too much,
at 6 percent.
The economy expanded 4.8 percent in the first quarter from
the same period a year before, and the central bank and
government have warned that growth in April was likely weak.
The result for April will be released on Monday.
The central bank has attributed slightly high inflation to
supply factors and expects inflation to cool later this year,
eventually reaching its goal of 2 percent in 2015.
The annual inflation rate rose to 3.56 percent in May, above
the upper limit of the central bank's 1 to 3 percent target
range for the fifth month in a row.
In November, the central bank surprised the market by
lowering the key interest rate by 0.25 percent to encourage
The central bank has said it expects a 5.5 percent expansion
In early May, Central Bank President Julio Velarde told
Reuters he would likely leave the base rate without changes in
the near future unless the bank's growth or inflation
expectations changed suddenly.
(Reporting by Lima Newsroom; Editing by Eric Walsh, Bernard