LIMA (Reuters) โ Peruโs central bank trimmed its benchmark interest rate by 25 basis points to settle at 4.75% on Thursday, surprising analysts who expected the countryโs monetary authority to hold the rate steady at 5%.
Peru has since September 2023 gradually eased the key lending rate from a high of 7.75% it held through the first part of that year.
In a statement, the central bank said the cut moves the rate to a level it estimates to be โneutralโ while adding future rate adjustments will track new data on inflation and its derivatives.
The bankโs decision to lower borrowing costs came after Decemberโs inflation rate inched up by 0.11% month-on-month, bringing price increases to 1.97% last year โ within the bankโs target range of 2% plus or minus once percentage point.
Prices were down from the 3.24% annual inflation rate recorded in 2023 and far below the 8.46% in 2022. Decemberโs annualized rate was also down from 2.27% the previous month.
Peru boasts one of Latin Americaโs lowest benchmark interest rates.
(Reporting by Marco Aquino; Editing by Sarah Morland)
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