Peru Holds Interest Rate as Policymakers Gauge Tariff Damage (1)

Peru kept interest rates unchanged as below-target inflation gives policymakers the flexibility to wait to see how election uncertainty and US tariffs affect growth and prices.

The central bank held its key rate at 4.5% for a third straight month on Thursday, as forecast by 12 of 13 economists surveyed by Bloomberg. One analyst had expected a quarter-point rate reduction to 4.25%.

“The expectations for global economic activity have worsened due to restrictive global trade measures,” the bank said in its statement. “Given that context, financial markets remain volatile.”

Peru’s inflation and borrowing costs are the lowest among Latin America’s ...