Concerns over inflation to push Peruvian rates higher

Last night the Central Reserve Bank of Peru (BCRP) hiked interest rates by 25bps to 3.75%, as expected. With the outlook for inflation deteriorating interest rates look set to rise further over the coming months. We expect rates to rise by an above consensus 75bps to 4.5% by year-end, but the ongoing commodity price shock means that the risks to our view may even lie to the upside.

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