LIMA, March 25 (Reuters) - Peru’s central bank president said on Wednesday that heavy rains and landslides this week would squeeze food supplies and push up inflation this month.
Higher food costs could push the annual inflation rate back above the upper limit of the central bank’s 1 to 3 percent target range after it eased to 2.77 percent last month.
“We are worried about the impact on inflation,” Central Bank President Julio Velarde told reporters when asked about the impact of rains.
“Weather is going to affect inflation this month, there’s no doubt,” Velarde said. “But it’s temporary.”
Peru declared an emergency in a district east of Lima on Wednesday after landslides killed eight people and blocked a key highway linking the capital to farming regions.
The government said the route would be cleared within seven days and warned food sellers not to take advantage of the situation to artificially raise prices.
Food costs carry the most weight in the consumer price index for metropolitan Lima, which the central bank uses to guide monetary policy.
“When food can reach Lima again without any problems, inflation should lower,” Velarde said.
Peru’s meteorological agency, Senamhi, said that the weather pattern El Nino, which warms the Pacific and can trigger heavy rains or drought, might emerge in May. But it said its intensity in Peru would be weak or moderate and that heavy rains are not expected. (Reporting by Marco Aquino; Editing by Diane Craft)