Peru’s Central Bank holds interest rates steady at 4.75%, assessing the impact of global trade wars on inflation. Despite local inflation trends being favorable, there is rising concern over tariffs that could affect exports. The bank projects further cooling of inflation and anticipates economic growth of 3% this year.
On March 13, 2025, the Central Bank of Peru decided to maintain its key interest rate at 4.75%. This decision aligned with the expectations of seven out of eleven economists surveyed, while four anticipated a reduction to 4.5%. The bank’s officials are evaluating potential inflationary threats from global trade wars.
Despite acknowledging favorable local inflation trends, the central bank noted heightened global economic risks, attributing this to uncertainties surrounding restrictive foreign trade measures. “In that context, high volatility in financial markets is being observed,” the bank mentioned in its statement.
Peru boasts one of the lowest inflation rates among emerging markets and is experiencing economic growth surpassing that of its regional counterparts. Nevertheless, officials express concern about the implications of US President Donald Trump’s trade policies on Peru’s exports, particularly metals and fruits, which could be subjected to tariffs.
In February, Peru’s annual inflation rate decreased to 1.5%, with the central bank predicting a further reduction to around 1% for the current month. The bank also anticipates an economic growth rate of 3% for the year. Energy and Mines Minister Jorge Montero indicated that a delegation is being organized to negotiate against potential tariffs on copper exports. Additionally, Agriculture Minister Angel Manero expressed optimism that US tariffs on Peruvian agricultural products like blueberries and grapes are unlikely, but stated that legal action could be pursued through the World Trade Organization if necessary.
The Central Bank of Peru’s decision to hold the interest rate at 4.75% reflects ongoing assessments of global economic risks from trade wars. Although local inflation remains low, there are concerns regarding potential tariffs that could affect key exports. With forecasts indicating continued economic growth, Peru is actively seeking to safeguard its trade interests amid international uncertainties.
Original Source: financialpost.com
