(Adds chief economist comments, background on Peru currency, inflation)
LIMA, Nov 13 (Reuters) - Peru’s central bank might raise the benchmark interest rate next month from 3.5 percent if inflation rises quicker than expected, the bank’s chief economist said on Friday, hinting at a hike as the falling exchange value of Peru’s sol threatens to heat up prices in the country.
A spike in food costs so far this month indicates that the rise in consumer prices in November will be “somewhat more” than October’s 0.14 percent increase, said chief economist Adrian Armas.
“But we’ll have to see the evolution of prices in the second half of November, because... there can be quick corrections,” Armas said on a conference call with reporters.
Armas said the sol currency’s renewed slide against the U.S. dollar would have an impact on inflation, which had cooled to 3.66 percent in October. The central bank’s inflation target rate is 1 percent to 3 percent.
“The bank expects inflation to converge to the target range next year, and thus we are looking at how inflation goes this month,” Armas said the call.
“It’s possible the central bank raises the interest rate in December if inflation conditions are not what the bank expects,” he added.
The sol has weakened nearly 1.5 percent against the dollar in the past two weeks on expectations for higher U.S. interest rates, despite Peru’s central bank’s frequent interventions in the spot market. (Reporting By Teresa Cespedes; Editing by Chris Reese and Bill Rigby)