Peru central bank holds interest rate for sixth straight time

LIMA, March 12 (Reuters) - Peru's central bank held its benchmark interest rate for the sixth straight time on Thursday, keeping it at 4.25% in line with analysts' expectations as inflation remains within the bank's target range.

Annual inflation in February was just 2.21%, ticking up for the fifth straight month but still comfortably within the bank's target range for inflation of between 1-3%.

However, the central bank's board said in a statement that greater financial market volatility and higher international oil prices related to conflict in the Middle East could add to inflationary pressures.

The board warned that inflation may temporarily move toward the upper end of its target range in the coming months, driven by climate-related events, rising global energy prices, and disruptions to natural gas and natural gas liquids (NGL) supplies, though it expects these factors to have only a temporary impact on inflation.

Confidence in Peru's central bank, led by long-serving chairman Julio Velarde, has helped insulated Peruvian markets and its economy from ongoing political turbulence. Peru's Congress voted to oust President Jose Jeri last month over a corruption scandal only four months into his term and just before elections scheduled for April 12. Lawmaker Jose Balcazar was sworn in as interim president to serve until the next president takes office on July 28 (Reporting by Natalia Siniawski and Marco Aquino; Writing by Brendan O'Boyle)