Peru Sees Rates Steady: Velarde
Peru's central bank does not yet see signs for a rate cut, central bank governor Julio Velarde said.
Peru's central bank
does not yet see signs for a rate cut, despite a dramatic drop
in commodity prices that may force authorities to revise down
growth forecasts, its central bank governor Julio Velarde has
"Of course we see a
slowdown but the signs are still not there (for lowering
rates)," he said. "This growth slowdown was expected, but I
don't believe it will be more dramatic."
Velarde's comments came amid mounting speculation that the
central bank will move to slash rates to boost growth that is
below market expectations. The sol meanwhile
experienced its sharpest weekly decline in four years, sliding
1.7% by last Friday.
The governor added that
even though commodity prices have fallen, "they're still at a
plateau that is pretty high."
The central bank might
revise down its growth projections. "There has been such a
dramatic fall in commodity prices that we now have to review
our forecasts for growth for the coming years. These prices
might affect the growth of the economy," Velarde
But he insisted that
growth was nevertheless stable. "We don't have the tailwinds
anymore but we don't have the headwinds either," he
projecting an average of 6.5% growth before the drop in
commodity prices, Velarde added. Peru's output expanded 5% in
February from a year earlier after a 6.2% jump in January, the
national statistics agency reported this month.
The central bank kept
rates on hold for a 23rd consecutive month on April 11, citing
stable growth and slowing inflation. Its next decision is May