LIMA, Aug 9 (Reuters) - Peru’s central bank will evaluate data in coming weeks to determine whether it will cut the benchmark interest rate for a second consecutive month in September, it said on Friday.
The bank cut the interest rate for the first time in more than a year on Thursday, but said it was not necessarily the start of an easing cycle.
“It doesn’t necessarily imply new reductions will be made, but that’s going to depend on information from now to four weeks later when the board will meet again,” Adrian Armas, the bank’s head of economic research, told reporters.
Armas said that after two months of disappointing growth, economic data for June show signs of a recovery, though “at a slower pace than expected.”
The bank is also monitoring potential impacts on economic growth from President Martin Vizcarra’s recent proposal to hold general elections in April of next year instead of in 2021.
Moody’s said on Thursday that the proposal posed a downside risk to Peru’s economy because it could delay approval of policies aimed at boosting competitiveness and may increase the chances of an “outsider” sweeping to power.
Congress, which must authorize laws to bring elections forward, has not yet voted on the proposal.
“We look at concrete data. We see that there’s been a reduction in indices of business confidence and we’re monitoring how that’s affecting the economy,” Armas said. (Reporting By Marco Aquino; Writing By Mitra Taj; editing by Diane Craft)