UPDATE 1-Peru's central bank holds key rate for fourth month in a row
(Adds comment from central bank, background on sol currency performance)
LIMA, June 9 (Reuters) - Peru's central bank left the benchmark interest rate unchanged at 4.25 percent for the fourth straight month on Thursday after inflation continued to retreat from a four-year high.
Twelve out of 13 economists polled by Reuters had forecast the rate would remain unchanged this month.
The annual inflation rate eased to 3.54 percent in May, closer to the upper limit of the central bank's target range of 1 to 3 percent.
The sol currency's depreciation last year had pushed inflation to a four-year high of 4.4 percent in January. But the sol has been strengthening against the dollar in recent months.
"The impacts on inflation from price increases of some foods and public services and the exchange rate have been reversed," the central bank said in a statement.
Peru's mining-dependent economy has been recovering since late last year on the back of surging copper output from new mines, but domestic demand has been relatively weak.
(Reporting by Mitra Taj; Editing by Tom Brown and Matthew Lewis)
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