Peruvian central bank cuts rates amid political crisis
Economy impacted by political crisis following the pardon of former president Alberto Fujimori
The Central Reserve Bank of Peru cut the key interest rate to 3% from 3.25% on January 11 on lower inflation and public spending, while the country grapples with political instability.
The year-on-year inflation rate fell to 1.36% in December from 1.54% in November, closer to the floor of the target inflation range of 1–3%. Twelve-month inflation expectations declined to 2.3% from 2.48%.
“This result is mainly explained by the reversal of supply shocks, to which a below-potential economic
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