(New throughout, adds quote from central bank, context)
LIMA, Dec 11 (Reuters) - Peru's central bank on Thursday left the benchmark interest rate unchanged at 3.50 percent for the third month in a row as widely expected because the economy is still growing below its potential.
Most analysts polled by Reuters said they expected the monetary authority to hold the rate steady as the currency slips and the economy shows signs of strengthening.
The central bank noted volatility in currency markets and the global oil slump, among other factors, for its decision this month.
"Lower international oil prices have started to gradually move into the domestic market," the central bank said in a statement.
But forecasts for economic activity still point to weak growth, the bank added.
The central bank now sees the potential growth rate, the pace at which the economy can expand without stoking inflation, at about 5.5 percent.
Consumer prices in Peru fell 0.15 percent in November as the annual rate remained slightly above the central bank's 1-3 percent target range.
The central bank has cut the benchmark interest rate twice this year as the economy has slowed to its weakest pace since 2009 on tumbling mineral exports and slipping private investment.
Last week, Central Bank President Julio Velarde told Reuters he saw more room for monetary expansion in the months ahead.
In September, the economy grew 2.7 percent from the same month a year earlier, the strongest monthly expansion since March but still well below surging rates in previous years.
The central bank now expects Peru's economy to expand by between 2.6 percent and 3 percent this year, following rates that tended to top 6 percent during a mining boom in the past decade.
Earlier this month, the central bank loosened reserve rules on deposits in soles, a pro-growth policy it has said it prefers to cutting the key interest rate.
A rate cut would likely further weaken the sol, which is trading at its weakest level in more than five years. (Reporting By Lima Newsroom; Editing by Grant McCool)