August 10, 2017 / 11:56 PM / a year ago

UPDATE 1-Peru cenbank holds rate as looks for moment to resume easing

(Adds quote from central bank statement, context)

LIMA, Aug 10 (Reuters) - Peru’s central bank held its benchmark interest steady at 3.75 percent as widely expected on Thursday but said it would pay special attention to data on inflation in order to keep loosening monetary policy “in the short-term.”

Thirteen out of 16 analysts in a Reuters poll had predicted the rate hold. The remaining three expected a new, 25-basis-point cut following two reductions earlier this year as the economy slowed sharply in the wake of severe flooding and a graft scandal that stalled public work projects.

“The board is especially attentive to new data on inflation and its determinants, particularly those related to inflation expectations and the evolution of economic activity, in order to continue making the monetary policy position more flexible in the short term,” the central bank said in a statement.

Expectations for end-of-year inflation have eased to 2.8 percent from 3 percent previously, according to a central bank poll in July. The bank’s inflation target range is 1-3 percent.

The economy expanded 3 percent in the 12 months through May , and the central bank has said it believes growth is now at a turning point following the slowdown in the first half of 2017.

The president of Peru’s central bank told Reuters on Tuesday that the bank has room for one or two more interest rate cuts this year, and that he does not expect the scenario of holding or lowering rates to change through 2018. (Reporting By Lima Newsroom; Writing by Mitra Taj; Editing by Sandra Maler)

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