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Peru central bank cuts benchmark interest rate to 5% as expected

BY Reuters | ECONOMIC | 11/07/24 06:18 PM EST

Nov 7 (Reuters) - Peru's central bank trimmed the nation's benchmark interest rate to 5% on Thursday, matching analysts' expectations of a 25-basis-point cut.

Peru has one of Latin America's lowest benchmark interest rates, and the central bank said in a statement that future rate changes will depend on inflation data and its determinants.

The cut came after consumer prices in the Andean nation fell for the second month in a row in October, coming down 0.09% from the prior month, while annual inflation was at 2%.

The monetary authority said "annual inflation and core inflation are expected to stay within the target range on the projected horizon," but added that it sees a slight, transitory increase in the annual rate.

The rate cut was also expected after the bank's chief economist, Adrian Armas, said last month that the evolution of inflation in Peru should lead to a series of "gradual" interest rate reductions. (Reporting by Aida Pelaez-Fernandez; Editing by Kylie Madry)

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