March 20, 2020 / 12:15 AM / 2 months ago

UPDATE 1-Peru cuts interest rate to decade low to battle coronavirus impact

(Adds milestone, central bank comments)

By Marco Aquino

LIMA, March 19 (Reuters) - Peru’s central bank slashed its benchmark interest rate on Thursday to a decade-low 1.25%, from 2.25% previously, in an extraordinary measure to counter the economic impact of the coronavirus pandemic.

The move came as the world’s No. 2 copper producer reported the first death of a patient with the coronavirus and as confirmed cases jumped 89 in one day to a total of 234 people.

“Economic activity in the country is being temporarily affected by the effects of the coronavirus pandemic, through a supply shock and the reduction of internal demand,” the bank said in a statement.

The central bank said “it has other additional liquidity injection instruments” to alleviate the crisis if needed.

“The risks around global and local economic activity have increased in recent days, including the possibility of a global economic recession in the first half of the year,” it added. (Reporting by Marco Aquino; writing by Cassandra Garrison; Editing by Sandra Maler and Leslie Adler)

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