Peru’s central bank kept the key interest rate unchanged at 4.75% as they monitor global trade tensions and their inflationary effects. While local inflation trends are positive, officials raised concerns about the impact of U.S. tariffs on exports. February’s inflation slowed to 1.5%, with expectations of further declines. Authorities are preparing to protect key commodities from potential tariffs.
On Thursday, Peru maintained its key interest rate at 4.75% as policymakers assess the inflationary effects of global trade tensions. This decision aligned with the expectations of seven out of eleven economists surveyed by Bloomberg, while four predicted a reduction to 4.5%. The central bank acknowledged favorable local inflation trends, yet expressed concern over increased global economic risks associated with trade restrictions.
The bank’s statement highlighted, “In that context, high volatility in financial markets is being observed.” Despite experiencing one of the lowest inflation rates in emerging markets, Peru’s authorities have recognized that U.S. trade policies, particularly those of President Trump, may adversely affect the nation, especially regarding potential tariffs on metal and fruit exports.
In February, Peru’s annual inflation decreased to 1.5%, and the bank anticipates further cooling to roughly 1% this month, with a projected economic growth rate of 3% for the year. Energy and Mines Minister Jorge Montero revealed plans for a delegation aimed at preventing copper tariffs. Agriculture Minister Angel Manero expressed skepticism about the U.S. targeting Peruvian products such as blueberries or grapes, though he stated that the country would resort to the World Trade Organization if necessary.
In summary, Peru’s decision to keep interest rates stable reflects ongoing evaluations of global economic uncertainties, particularly stemming from U.S. trade policies. While the nation boasts low inflation and robust economic growth, the potential impacts of tariffs on crucial exports remain a concern. Authorities are proactively preparing to safeguard Peru’s interests in international trade matters.
Original Source: www.livemint.com
