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Peru: Rising food inflation set to delay interest rate cuts

Rising food inflation is likely to dissuade Peru’s central bank from cutting its policy interest rate for the time being. But with the economy slowing and core price pressure low, an easing of monetary policy is likely when the impact of recent floods on food prices starts to unwind. As such, we now expect the policy rate to fall to 3.75% by the end of the year (from 4.25% currently).

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