Julio Velarde has won LatinFinance’s Central Bank Governor of the Year Award —based on the opinion of economists and financial experts— that rewards his strong management as governor of the Central Reserve Bank of Peru (BCR).
According to LatinFinance —one of the leading sources of value added financial market intelligence in the world— economists and financial analysts are surveyed each year to determine who was the most effective central bank governor in Latin America.
“We examine the institutions’ results in managing monetary policy, controlling inflation and ensuring financing stability. We also take into account the banks’ transparency and effectiveness in communicating with markets,” reads the story.
Although Peru has faced inflationary pressures, especially from the supply side, the central bank’s focus has remained focused on keeping consumer prices within a tight 1% to 3% target range, said LatinFinance.
In the second half of last year, it continued, the central bank started bumping up its reference interest rate in 25-basis-point increments from 3.25% to 4.25%, where it has remained steady since February. It has also relied heavily on commercial bank reserve requirements to modulate monetary policy.
Latin America economist at Barclays Capital Alejandro Arreaza said Velarde "has gradually hiked interest rates, ensuring that inflation converges to the target range, while allowing the economy to gradually recover from the recent slowdown, pointing to register the fastest growth in LatAm this year."
"The problem we saw last year is that inflation expectations were starting to increase, and we thought that controlling inflation would be more costly afterwards. That is why we increased the reference interest rate in September, December, January and in February, raising it from 3.25% to 4.25%, where it is now," he says.
Velarde has built up a level of "high credibility, not only for the central bank but also for Peru as a sovereign", says Bertrand J. Delgado, senior emerging markets strategist with HSBC, pointing to Velarde’s strong management of risks associated with the foreign exchange market and dollarization.
This prize is added to the impressive list of awards attributed to the Peruvian governor: Global Finance award for World's Best Central Banker in 2016 and 2015, The Banker's 2015 Central Banker of the Year, the Distinguished Service of the Year prize conferred by LatinTrade at the 2012 BRAVO Business Awards and, Emerging Markets’ Central Bank Governor of the Year in Latin America.
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Published: 9/15/2016