(New throughout, adds details, background and central bank statement)
LIMA, Nov 13 (Reuters) - Peru’s central bank on Thursday left the benchmark interest rate unchanged at 3.50 percent for the second month straight as expected, but reiterated its view that economic growth is below potential.
Most analysts polled by Reuters said they expected the monetary authority to hold the rate steady as the currency slips and inflation runs slightly above its target ceiling.
The central bank has cut the key rate three times in the past year as the economy has slowed to its weakest pace since 2009.
“Current and preliminary indicators of economic activity continue to show growth under its potential,” the central bank said in a statement.
The bank added that temporary supply factors drove prices up in October, pushing the annual inflation rate to 3.09 percent.
The central bank aims to keep inflation between 1 percent and 3 percent.
Earlier on Thursday Central Bank President Julio Velarde said prices would likely fall in November on slipping fuel and food costs.
Peru’s economy is on track to expand by around 3 percent this year, following rates that tended to top 6 percent amid a mining boom in the past decade.
The central bank has said it now sees Peru’s potential growth rate, the pace at which the economy can expand without stoking inflation, at around 5.5 percent.
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 around its weakest level in more than five years.
The central bank has sold $3.4 billion in the local spot market as the sol has slipped by about 4.75 percent this year. (Reporting By Lima Newsroom; Editing by Chris Reese and David Gregorio)