Peru rate hike another step in gradual tightening cycle

The Central Reserve Bank of Peru’s decision to follow up September’s surprise interest rate hike with a second 25bp hike, to 3.75%, shows that policymakers are still concerned about the persistence of above-target inflation. We suspect it is just another step in the gradual tightening of monetary policy that will continue over the next eighteen months as inflation remains stubbornly high.

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