LIMA, March 13 (Reuters) - Peru’s central bank kept its benchmark interest rate unchanged at 4 percent for the fourth month in a row on Thursday, saying slower-than-usual economic growth will likely pick up in the first quarter.
All 12 foreign and local economists polled by Reuters this week forecast the bank would again keep the rate unchanged.
The central bank reiterated on Thursday, as it has in previous months, that economic growth has been weaker than its potential but that it would pick up again soon.
“Indicators of productive activity and expectation polls point to a recovery in economic activity in the first quarter,” the bank said in a statement. “The board is attentive to the projection of inflation and its determinants in considering, if necessary, additional easing measures of monetary policy instruments.”
The monetary authority said higher-than-expected inflation in February was driven by supply factors that would soon subside - eventually cooling to 2 percent this year from the current annual rate of 3.78 percent.
The central bank’s target range for inflation is from 1 to 3 percent.
Central Bank President Julio Velarde has said that the bank prefers loosening reserve requirements on commercial banks as it did this month and several times over the past year instead of further lowering the benchmark rate to spur growth.
In November the central bank surprised the market by lowering the interest rate by 0.25 percent to stimulate growth, its first rate cut in more than four years.
Peru’s economy, which expanded at an annual average rate of 6.5 percent over the past decade, slowed to grow 5 percent in 2013 as global prices for the Andean country’s mineral exports weakened.
The government statistics agency said last month that last year’s economic expansion would have been closer to 5.3 percent if a new method for calculating gross domestic product were used.
Data on economic activity in January will be released on Friday. Analysts polled by Reuters said the economy in the first month of 2014 likely slowed to grow 4.85 percent compared to the same month in 2013.
Peru is one of the world’s top exporters of copper, gold and silver. Its potential growth rate, the pace at which the economy can expand without stoking inflation too much, has typically been seen at between 6.0 percent and 6.5 percent.
The government and central bank both expect a 6 percent expansion this year.