In May 2010, BCR raised the interest rate from 1.25 to 1.50 percent, in June from 1.50 to 1.75 percent, in July from 1.75 to two percent, in August from two to 2.50 percent, in September from 2.50 to three and between October and December 2012 it held the interest rate at three percent.
In January 2011, BCR increased its reference rate by 0.25 basis points and since June 2011 the bank maintains it at 4.25 percent.
This decision is based, on the one hand, on the fact that inflation’s deviation from the target has reflected mainly transitory supply factors and, on the other hand, on the fact that the economy’s pace of growth is close to its potential rate of growth.
Moreover, high uncertainty is still observed in international financial markets and is being reflected in the decline of terms of trade and in prospects of lower growth in both developed and emerging countries.
Inflation in June showed a monthly rate of -0.04 percent, as a result of which inflation in the last 12 months declined from 4.14 percent in May to 4.00 percent in June.
Core inflation recorded a rate of 0.20 percent in June and thus accumulated a rate of 3.64 percent in the last 12 months.
Inflation excluding food and energy registered a rate of 0.13 percent and an annual rate of 2.46 percent.
The evolution of inflation in June shows that the supply factors that led inflation to rise transitorily above the target range continue to reverse.
Annual inflation is therefore expected to decline in a sustained manner in the rest of the year, with inflation converging to the target range.
Some current and advanced indicators of activity show that the economy’s growth has stabilized around its long-term sustainable level of growth, although the indicators associated with the external market register a weak performance.
On the other hand, indicators of global economic activity show that uncertainty about the pace of global economic activity has increased.
The Monetary Program for July will be approved on the Board’s session of August 9, 2012.