UPDATE 1-Peru cenbank will not likely hike reserve deposits again
(Adds comments on reserve requirements, inflation expectations)
LIMA, March 11 (Reuters) - Peru's central bank said on Friday it does not expect to raise commercial banks' local currency reserve deposit requirements again following a 25-basis-point hike this month.
Central bank Chief Economist Adrian Armas said the previous level of 0.75 percent was "exceptionally low."
The increase to 1 percent likely withdrew some $50 million from the economy, according to the central bank.
"For now, no new adjustments are in the works. The conditions of the monetary market would have to change," Armas said on a conference call with reporters.
The hike was seen as easing pressure on the central bank for another increase to the benchmark interest rate this month.
The bank held off on Thursday from raising the key rate again after three consecutive hikes as the local currency gained and the annual inflation rate slowed to 4.47 percent. The central bank's inflation target range is 1 to 3 percent.
Armas said monetary policy was still expansive and that tightening would depend in part on the market's view of inflation in 12 months, a forecast that stayed at 3.5 percent in a central bank poll last month.
"Obviously expectations are still at an uncomfortable level for the central bank and are not in line with the bank's credibility," Armas said.
"The central bank will closely watch how inflation expectations evolve" to determine if additional hikes are needed, he added.
Armas also said the bank expects inflation to spike this month because of heavy rains but temporary pressures on food prices should subside in April. (Reporting by Mitra Taj; Editing by Phil Berlowitz and Cynthia Osterman)
© Thomson Reuters 2016 All rights reserved.