Peru central bank says data on prices point to gradual rate cuts
Adds details and context throughout
Oct 11 (Reuters) -The evolution ofinflation in Peru should lead to aseries of "gradual" interest rate reductions, the bank's chief economist said on Friday, a day after the bank unexpectedly held its benchmark rate steady.
Speaking at a webcast press conference, the bank's chief economist Adrian Armas said rate cuts should be gradual in part due to inflation expectations that have not decreased.
He also said core inflation, a closely-watched indicator of price trends that strips out some volatile products, has fallen within the bank's target range but remains above the ideal level at the range's center.
Armas made the comments a day after the central bank unexpectedly held the key borrowing rate at 5.25% after two consecutive cuts.
A Reuters poll of economists had projected a rate cut of 25 basis points.
"All the indicators for inflation and its determinants suggest that, for now, the path to follow is a gradual reduction in rates, monitoring the indicators month by month."
The central bank's board said in its decision on Thursday that future rate decisions will depend on how price pressures continue toevolve.
"The central bank's projections do not imply immediate rate cuts, but rather a more gradual trajectory," said Armas.
Peru has one of Latin America's lowest interest rate, and headline inflation fell in September below 2% for the first time in four years.
Reporting by Brendan O'Boyle; Editing by Anthony Esposito and David Alire Garcia
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