Peru Says Andeans Unlikely to Change Policy on CPI Drop

Falling inflation rates in Colombia, Chile and Peru last month reflected easing fuel and food prices and are unlikely to lead to a change in monetary policy, Peruvian central bank President Julio Velarde said today.

The three Andean nations all reported that inflation slowed in November, even as all three are on track to exceed the average economic growth rate this year in Latin America and the world, according to the median estimate of analysts surveyed by Bloomberg.

Chile and Peru kept borrowing costs unchanged in their last meetings of policy makers, while Colombia reduced its key rate, surprising analysts surveyed by Bloomberg. November inflation will do little to sway policy makers because it reflects external rather than internal economic conditions, Velarde told reporters in Santiago.

“This was a reverse in the supply shock, not demand,” he said when asked about easing inflation rates. “This isn´t something that should change monetary policy.”

Chile’s inflation rate dropped to 2.1 percent in November from 2.9 percent the month before, while Peru’s fell to 2.66 percent from 3.25 percent and Colombia’s to 2.77 percent from 3.06 percent.

To contact the reporter on this story: Randall Woods in Santiago at rwoods13@bloomberg.net.

To contact the editor responsible for this story: Philip Sanders at psanders@bloomberg.net.

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