Peru inflation eases in May for second straight month

LIMA (Reuters) – Peru’s monthly inflation rate slowed for the second month in a row May to 0.09%, bringing annual inflation down to its lowest level in three years, according to data published on Saturday by national statistics agency INEI.

On a yearly basis, prices in May slowed to 2%, within the central bank’s target range and below the annual rate recorded a month prior as the country shakes off the effects of the COVID pandemic and other shocks.

The May easing was the result of a drop in prices of both food and non-alcoholic beverages, according to the consumer price index (CPI) for Metropolitan Lima, the inflation reference for the Andean nation.

© Reuters. FILE PHOTO: A woman sells cloth trimmings at a stand at Surco market in Lima, Peru August 31, 2018.  REUTERS/Mariana Bazo/File Photo

Core inflation – which excludes food and energy prices because of their high volatility – rose 0.16% last month.

Falling annual inflation within the central bank target range of between 1% and 3% could help the bank maintain its monetary easing cycle. Peru’s central bank reduced the key interest rate by 25 basis points to 5.75% in May, following a reduction in April and forecasts that the CPI will continue its downward trend this year.

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