Rate Hiking Cycle Over

BMI View: We now expect the Banco Central de Reserva Del Perú (BCRP) to put interest rates hikes on hold at least until the end of 2012, leading us to revise down our policy rate forecast from 4.75% in 2011 to 4.25% in 2011 and 2012. While inflation remains slightly above the target range, we believe price growth is under control which allows the BCRP to keep interest rates unchanged, although growth is not slow enough to prompt a rate cut.

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