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LIMA, Jan 12 (Reuters) - Peru's central bank held its benchmark interest rate steady at 4.25 percent for the 11th consecutive month on Thursday, as expected, forecasting inflation would fall to within its 1 to 3 percent target range by the middle of the year.
All 11 economists polled by Reuters had forecast the rate hold after inflation eased to 3.23 percent at the end of 2016.
The impact of droughts in several farming regions will likely be transitory and economic growth should quicken in the coming quarters on a recovery in public investment, better terms of trade and signs of strengthening global growth, the central bank said in a statement.
"Economic growth slowed in the last quarter of 2016, in a context of weaker public spending," it said.
Surging copper output from new and expanded mines has been driving economic growth as domestic demand has slowed and the government cut spending to rein in a wide fiscal deficit.
Pedro Tuesta, a Latin America analyst for 4Cast, said that barring any surprises, the central bank appeared to be inclined to leave the rate unchanged for all of 2017. (Reporting by Mitra Taj; Editing by Alan Crosby and James Dalgleish)