Peru’s central bank probably will keep borrowing costs unchanged today for a 22nd consecutive month after weakening the sol and reining in credit growth.
The five-member board, led by bank President Julio Velarde, will leave the overnight rate at 4.25 percent, the lowest in Latin America after Colombia, according to all 14 economists surveyed by Bloomberg. The decision will be announced at about 6 p.m. in Lima.
The sol had the biggest two-month decline to start a year since 2009 after the central bank raised dollar reserve requirements three times since Jan. 1 and stepped up purchases of U.S. currency. While the lowest inflation rate in two years gives policy makers room to consider cutting rates to slow dollar inflows, domestic demand remains too strong, said Francisco Rodriguez, a senior Andean economist at Bank of America Corp.
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