(New throughout, adds details of inflation forecasts, background on inflation rates)
LIMA, Nov 18 (Reuters) - Peru’s central bank raised its view of 2015 inflation to 3.9 percent on Wednesday and said reanchoring inflation expectations were “fundamental” in determining increases to the benchmark interest rate.
The central bank’s last forecast in September put full-year 2015 inflation at between 3.4 and 3.6 percent. Since then, the annual inflation rate has eased to 3.66 percent from 4.04 percent.
But the bank’s general manager, Renzo Rossini, said a spike in food prices this month and the impact of the sol currency’s depreciation on prices would push up the inflation rate in what remains of 2015.
“But what’s important is inflation in the future, and how expectations evolve,” Rossini said at a Thomson Reuters forum.
The central bank wants to push inflation expectations back down toward its target range of 1 to 3 percent.
Rossini said that inflation expectations would be “fundamental” to the central bank’s monetary policy going forward.
Analyst expectations for inflation remained largely stable in a central bank poll last month, easing to 3.2 percent from 3.3 percent for 2016 but staying at 3.8 percent for 2015. “They still haven’t lowered, but we’ll have to see what the next poll says,” Rossini said.
The central bank raised the interest rate in September to tame currency-driven inflation after expectations spiked to above the target ceiling.
The central bank survey of analyst expectations for inflation is scheduled for publication early next month.
Next year inflation should cool to 2.9 percent, Rossini said.
Last week central bank hinted at a rate hike in its December policy meeting, scheduled just ahead of the U.S. Federal Reserve’s policy meeting.
Expectations for a Fed rate hike have stoked demand for dollars in the local spot market. The sol has been trading around its weakest level in more than nine years, despite frequent interventions by the central bank.
But Rossini said that the central bank thinks the sol is operating near its fundamentals, despite short-term volatility.
“We consider that it is near equilibrium right now...it’s at a competitive level,” Rossini said.
The central bank also widened its view of the current account deficit for this year and next, and trimmed its 2015 growth outlook to 3.0 percent from the 3.1 percent it had forecast in September.
Growth should come in at 3.9 percent in the fourth quarter from the same period a year ago, Rossini said. (Reporting By Mitra Taj and Teresa Cespedes; Editing by Chizu Nomiyama)