Peru’s central bank sets benchmark interest rate at 7.5%

A worker walks pasts the logo of the Central Reserve Bank of Peru (BCRP) inside its headquarters building in Lima

LIMA (Reuters) – Peru’s central bank increased its benchmark interest rate 25 basis points to 7.5% on Wednesday, the 17th consecutive hike as monetary policymakers in the copper-producing Andean nation battle stubbornly high inflation.

The bank has raised the rate periodically since August 2021 to combat rising inflation that hit 8.45% in November on an annual basis.

Peru’s central bank said the outlook for most leading economic indicators and expectations remains pessimistic, with continued concern over external factors driving up energy and food prices.

Peru, the world’s No. 2 copper producer, is among the fastest growing economies in the region but political instability has jeopardized its prospects.

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On Wednesday, President Pedro Castillo was ousted after trying to dissolve Congress in a months-long political crisis.

(Reporting by Marco Aquino and Carolina Pulice; Editing by Brendan O’Boyle and Richard Chang)