March 9, 2016 / 8:48 PM / a year ago

Peru central bank head sees tamer inflation ahead

March 9 (Reuters) - The head of Peru's central bank on Wednesday said he expects inflation to ease up in the second half of this year and through 2017, but he is prepared to take the necessary actions to ensure that inflation remains anchored.

Speaking in New York two days ahead of a scheduled rate decision, Julio Velarde said future rate hikes remain dependent on incoming economic data, but he does not believe the bank needs to remain as aggressive on rates as it has been.

The bank has raised rates by a quarter percentage point at each of its last three meetings. Last month it raised its policy rate to 4.25 percent and is expected to lift it another quarter point at Friday's meeting to 4.5 percent, according to a Reuters poll.

Velarde said he expects inflation, which was running at 4.47 percent on an annualized basis in February, will ease to 3.1 percent by the end of 2016 and 2.5 percent by the end of 2017.

Writing by Dan Burns; Reporting by Dion Rabouin

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