Peru's central bank held its benchmark interest rate for the eighth straight time on Thursday, keeping it at 4.25%, in line with analysts' expectations, after inflation in April remained outside the bank's target range.
Peru's inflation has risen recently after a series of energy shocks sent prices soaring in March, with the monthly inflation rate jumping to an over three-decade high. Inflation eased in April, but the annual rate still climbed to 4.01% - well above the central bank's target range of 1%-3%.
The central bank's board said in a statement on Thursday that since most of the recent inflation has been associated with temporary supply-side factors, it sees inflation falling to around 2% in 2027 as these supply shocks dissipate.
"Global risk remains elevated due to the conflict in the Middle East, reflected in greater financial market volatility and high international oil prices. Despite this, global economic growth prospects for this year remain positive, and the terms of trade remain favorable for the Peruvian economy," the central bank added.
Peruvians will head back to the polls next month to choose a new president in a runoff election. Conservative Keiko Fujimori and leftist Roberto Sanchez are leading the vote count in the final stretch of Peru's first round vote, held last month. The final two candidates facing off in June's runoff are expected to be announced in coming days.
Reporting by Marco Aquino and Brendan O'Boyle; Editing by Daina Beth Solomon and Kylie Madry
Source: Reuters