Peruvian inflation dipped sharply in July, bolstering expectations that the central bank will start cutting interest rates this year.
(Bloomberg) — Peruvian inflation dipped sharply in July, bolstering expectations that the central bank will start cutting interest rates this year.
Consumer prices in Lima in July rose 5.88% from a year earlier, slightly higher than the 5.82% median forecast of economists surveyed by Bloomberg. In June, annual inflation had reached 6.46%.
All of Latin America’s major inflation-targeting economies are forecast to ease monetary policy in the short term as inflation slows across the region. Chile led the way last week, with a bigger-than-expected interest rate cut, and Brazil is forecast to follow suit on Wednesday.
Prices in Lima rose 0.39% from a month earlier, according to statistics agency INEI.
Central bank chief Julio Velarde has said he is wary of cutting rates too early. He has forecast that inflation will slow to 3.3% by the end of the year, from a quarter-century high of 8.8% last year.
The central bank targets annual inflation of 2%, plus or minus one percentage point.
Read More: Fed Loses to Hyperinflation-Scarred Brazil in Race to Cut Rates
The central bank holds it next monetary policy meeting on Aug. 10.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.