Peru Central Bank Raises Sol Reserve Ratio as Growth Acceleratesby
Central bank uses reserve measure for first time since 2013
Action increases amount of soles banks must hold in reserve
Peru’s central bank increased sol reserve requirements for the first time since 2013 as economic growth picks up and inflation holds at a four-year high.
The measure will reduce by 170 million soles ($48 million) the amount of cash banks have available to lend, the Banco Central de Reserva del Peru said in an e-mailed statement Sunday.
The central bank has raised its overnight rate four times in the last six months, most recently on Feb. 11, after economic growth accelerated in the fourth quarter amid a surge in copper production. The monetary authority will use “all the instruments at its disposal” to guarantee inflation converges to the target range, Adrian Armas, the bank’s chief economist, told reporters on Feb. 12.
Peru’s annual inflation rate probably slowed to 4.5 percent in February from 4.61 percent in January, remaining above central bank’s target range of 1 percent to 3 percent, according to the median estimate of analysts surveyed by Bloomberg. The government’s statistics agency will publish the figure March 1.
The reserve measure raises the minimum level of deposits banks must hold at the central bank to 1 percent from 0.75 percent previously, the bank said in its statement.