The Central Reserve Bank of Peru
Introduction
The Directory of the Central Reserve Bank of Peru agreedgoal;The expectation of inflation at twelve months was reduced to 2.40 percent in February. The indicators of non -primary economic activity continue to show signs of dynamism, although production is below its potential. The risks regarding world economic activity are maintained, although less volatility in international financial markets has been observed.
Developing
During the nearly 12 years that the conduct of the emitting entity is in charge, the main indicators of the macroeconomics (inflation rate and growth of the real GDP) had stable behaviors despite the political noise that always motivate uncertainty in the behavior of theMarkets and local and foreign economic agents and external shocks. If we statistically compare the inflation rate and economic growth from 2006 to 2018, we will verify the correct management of monetary policy instruments. The World Bank stressed today that Peru has a good management of monetary policy and ruled out that a fiscal adjustment generates concern.
In a context in which the Latin America and the Caribbean region begins to recover after six years of deceleration. The chief economist of the World Bank for the region, Carlos Végh, presented the latest semiannual report. ‘Between the sword and the wall: the crossroads of monetary policy in Latin America and the Caribbean’. The document explores the potential of monetary policy to support growth, without risking difficult achievements obtained in the battle against inflation. "Regarding Peru I think that things have generally done well, Peru has been one of the countries that has followed the example of Brazil a little, the interest rate (reference) has first uploaded and then has lowered it,"Végh said regarding monetary policy.
The Central Reserve Bank of Peru (BCR) raised the reference rate up to 4.25% during 2016, and then gradually lower it to 3.5% in September of this year, in order to stimulate the country’s economy. Likewise, the chief economist of the World Bank for Latin America and the Caribbean, ruled out any concern for the Peruvian economy regarding the recent extension of the fiscal deficit to deal with the highest infrastructure expenses after the impact of the rains of El Niño Coster. In last August, the Congress of the Republic approved to increase the fiscal deficit of 2.5% to 3% for this year and 2.3% to 3.5% for 2018, with a gradual reduction until 2021 to be 1% of the internal gross product (GDP).
"Of course, a fiscal adjustment is going to be needed as in all countries, but I don’t see any reason for immediate concern for Peru.". The Directory of the Central Reserve Bank (BCR) will choose to keep at the current level of 2.75% The reference interest rate at its meeting this Thursday to define the March 2019 monetary program, said the Credit Bank of Peru (BCP) today. ‘This Thursday the BCR will carry out its third monetary policy meeting of the year, where we do not expect changes in the reference rate,’ the BCP economic studies area said in a weekly report. He explained that, on the side of inflation, the IPC in Metropolitan Lima increased 0.13% last February.
A result that was located well below what was expected by the consensus of analysts for the second consecutive month (Bloomberg: 0.23%) and compared to its historical median. He said that, with the February result, annual inflation slowed down again from 2.1% in January 2019 to 2% in February 2019, which remained for the fourth consecutive month within the target range of the BCR of between 1% and 3%. In contrast, in February inflation without food or energy remained stable in 2.4%. In that line, the BCP said that it does not expect movements at the BCR reference rate this Thursday. “Our base scenario considers that the discussion about the withdrawal of the monetary stimulus will only begin in the second semester of 2019. At most we expect two rate increases this year ".
conclusion
In the economic activity level, the BCP said that indicators of lower growth are beginning to be observed in the first quarter of 2019. He said that in January a large part of the indicators presented in the INEI’s conjunctural advance. He cited that the fishing fell 31.3% for the lowest anchovy capture, while mining production continued on negative terrain when contracting 1.4%, the fifth consecutive month of fall. Instead, he indicated that internal cement consumption returned to positive land with an expansion of 1.8% in January, after falling in December (-1.two%). For February, he said that electricity production remained stable in 5.5%, while public investment registered a contraction around 20% in real terms, after falling 14.3% in January.
References
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Jorge Medicine Di Paolo. (2019). El Peruano newspaper.
Parodi, c. (2012). MANAGEMENT DIARY.
Peru21. (2019). Peru21 newspaper.
Pont, a. M. (October 2016). The Economist Tábano.
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