Peru
Peru[PEN]
...
Institutional setup of monetary policy decisions and operations
| Policy decision body, size and composition | The Board of Directors is integrated by seven members. The Executive and the Legislative Branches each appoint three members to the Board. The Chairman (Governor) is designated by the Executive and ratified by the Permanent Commission of the Congress. |
|---|---|
| Major mandates 1 | As established by the Peruvian Political Constitution of Peru, the objective of the BCRP is to preserve monetary stability. |
| Decision-making process | Majority |
| Frequency / length of meetings | Weekly |
| Frequency of announcements | Monthly |
| Main policy target | Reference rate: Overnight Interbank Rate |
Overview of key features
| Key policy rate | Reference Rate |
|---|---|
| maturity (days) | 1 |
| Operating target | Uncollateralized overnight interbank rate |
| maturity (days) | 1 |
| Standing facilities | Lending, deposit |
| Corridor width (bp) | 250 |
| Reserve requirements | Yes |
| maintenance period | Monthly |
| Main operation 2 | RP, Central bank Bills, Time Deposits |
| functions | Liquidity management |
| maturity (days) | Various |
| regular interval | No |
| frequency | As required |
| Overall frequency | Daily |
| Discretion left to operational desk | No. The Operational desk proposes the term and size of auctions; however the final decision is taken by Monetary Operations Committee (MOC). |
| Key policy signals via | |
| announcement | √ |
| keynote tender | √ |
| standing facility | √ |
| other |
Monetary policy communication
| Explicit use of forward guidance | Qualitative Forward Guidance: The Board indicates what is expected in the near future regarding the monetary policy stance, and how is this related with the inflation determinants. |
|---|---|
| Timing / media of policy announcement | 6:00 pm on the day of board meeting; central bank website |
| Policy announcement and documents | Target policy rate and press release |
| Explaining policy decisions | All monthly policy decisions are accompanied by a press conference call held by the Chief Economist at 12:00 pm the day after the decision. All Quarterly Inflation Reports are accompanied by a press conference held by the Governor at 12:00 pm |
| Dissemination of minutes (timing / media) | No |
| Content of minutes | N/A |
| Publication of forecasts 3 | In the Quarterly Inflation Report |
| Publication of projected path of policy rate 4 | No |
Reserve requirements: ratios and size
| Main functions served | Macroprudential purposes. The rate of reserve requirements changes with the purpose of contributing to an orderly evolution of liquidity and credit |
|---|---|
| Domestic currency | Yes |
| Foreign currency | Yes |
| Average | Yes |
| Required reserves | PEN 11,0 bn and USD 13,2 bn (6% in domestic currency and 35% in foreign currency of the monthly average of liabilities included within the reserve requirement) 5 |
| Required reserve as % of GDP | 4,57% 6 |
| Actual reserves | PEN 11,2 bn and USD 13,4 bn 7 |
| Actual reserve as % of GDP | 4,69% 8 |
Main features of reserve requirements
| Averaging | Yes |
|---|---|
| Carry-over | No |
| Type | Contemporaneous |
| Maintenance period | Monthly |
| end (day) | Last day of month |
| Calculation period | Monthly |
| end (day) | Last day of month |
| Lag before maintenance | No |
| Vault cash | Yes |
| restrictions | Yes |
| Remuneration | Yes |
| average rate | |
| marginal rate | Domestic currency: Max(0, Reference Rate - 395 bps) Foreign currency: Max(25% x (Term SOFR 1M - 10 bps), Term SOFR 1M – 50 bps) |
| Framework last changed | Domestic currency: May-22; Foreign currency: Apr-21 |
Liquidity position and forecasting
| Structural Position | Surplus |
|---|---|
| Most volatile factor(s) | Government sector flows |
| Most unpredictable factor(s) | FX operations |
| Forecast horizon(s) | Daily, weekly, monthly |
| Frequency | Daily |
| Frequency of revision | Daily |
| Forecast published? | No |
Standing facilities: lending / market ceiling
| Name | i) Credit facility ii) Direct Repo |
|---|---|
| Form | i) Secured Loan ii) Repo |
| Pricing method | Reference Rate + 50 bps for the first 10 operations in the last 3 months. Thereafter, the rate is set by the MOC |
| Maturity | O/N |
| Access limited by/to | Depositary institutions |
| Function(s) | Instruments used by the central bank as lender of last resort. |
Standing facilities: deposit / market floor
| Name | Overnight deposits |
|---|---|
| Form | Deposit |
| Pricing method | Reference Rate - 200 bps |
| Maturity | O/N |
| Access limited by/to | Depositary institutions and investment banks |
| Function(s) | Set the floor for the interbank rate |
Open market operations: repo or reverse repo
| Name/Type 9 | RP |
|---|---|
| Maturity | Up to 12 months (Temporary up to 3 years in 2017 - 2018) |
| Frequency | As needed |
| Pricing method | Multiple price auction |
| Access limited by/to | Mainly Depositary institutions. However, pension funds and mutual funds can be allowed to participate |
| Function(s) | Inject local currency liquidity |
Open market operations: central bank bills
| Name | i) Certificate of Deposit ii) Floating Rate Certificate of Deposit |
|---|---|
| Total issuance | i) PEN 5,1 billion ii) PEN 20,2 billion 10 |
| Maturity | Currenly up to 3 month |
| Restrictions on possible maturities | Up to 3 years |
| Pricing method | Multiple price auction |
| Access limited by/to | There are no limits. However, the central bank can set limits by institution |
| Discretion left to operational desk | The MOC determines the size, tenor, and timing based on proposal of the operational desk |
Open market operations: FX swaps
| Maturity | |
|---|---|
| Frequency | |
| Pricing method | |
| Access limited by/to | |
| Function(s) |
Other significant liquidity management means
| Name/Type 11 | FX Repo; Repo of credit portfolios; Repo of credits' securitization; Repo of credit portfolios guaranteed by the Governemnt, Deposits from the public sector; Time Deposits; FX Linked Certificates of Deposit; Dual currency Certificates of Deposit |
|---|---|
| Form | RP; RP; RP; RP; Deposit; Deposit; Bill; Bill |
| Frequency | As necessary |
| Maturity | Up to 5 years; Up to 4 years; Up to 1 year; Up to 4 years; Up to 1 year; Up to 1 year; Up to 1 year; Up to 1 year |
| Pricing Method | Multiple price auction |
| Access limited by/to | Depositary institutions; Depositary institutions; Depositary institutions; Depositary institutions; Depositary institutions; Depositary institutions; Local financial institutions; Local financial institutions |
| Function(s) | Provide short and medium term liquidity; Provide short and medium term liquidity; Provide short and medium term liquidity; Provide medium term liquidity; Provide short and medium term liquidity; Withdraw liquidity; Withdraw liquidity / FX Intervention; FX Intervention |
Settlement systems and intra-day liquidity facilities
| Settlement system | LBTR (RTGS) |
|---|---|
| Intra-day liquidity facility | Intra-day repo |
| Charge | No charge |
| Foreign currency settlement system | Yes |
| CLS participation by banks | No |
| Other settlement system(s) | No |
Collateral
| Standing facilities: List of eligible collateral | Securities issued by the Central Bank Securities issued by the Central Government Mortgage related securities issued by financial institutions rated AA or higher, Corporate bonds issued by non-financial institutions rated AA or higher, Letter of guarantee from another bank rated B+ or higher, Deposits at the Central Bank, Others to be announced by the Central Bank |
|---|---|
| Standing facilities: Discretion of central bank on collateral 12 | Yes |
| Open market operations: List of eligible collateral | Securities issued by the Central Bank, Securities issued by the Central Government, Mortgage related securities issued by financial institutions rated AA or higher, Corporate bonds issued by non-financial institutions rated AA or higher, Others to be announced by the Central Bank |
| Open market operations: Discretion of central bank on collateral 13 | Yes |
Dissemination of operational information: liquidity forecast
| Forecast published? | No |
|---|---|
| Channel(s) | |
| Timing | |
| Remarks |
Dissemination of operational information: open market operations
| Volume and price published? | Yes |
|---|---|
| Channel(s) | BCRP website |
| Timing | Immediately after operations |
Dissemination of operational information: standing facilities
| Lending facility usage: Channel(s) | BCRP website |
|---|---|
| Lending facility usage: Timing | End of day |
| Deposit facility usage: Channel(s) | BCRP website |
| Deposit facility usage: Timing | End of day |
Other information dissemination
| Type | (i) FX intervention (ii) Interbank rate (iii) Market data |
|---|---|
| Channel(s) | BCRP Website |
| Timing | (i) After market closing (ii) End of day (iii) Daily and Weekly (iv) Daily |
1 Describe as well the legal status of the mandate and involvement of government
2 RP = reversed purchase (repo, inject liquidity), RS=RRP=reversed sale (reverse repo, absorb liquidity), RT=reversed transaction (repo or reverse repo).
3 For instance, economic and inflation forecasts related to policy decision.
4 If applicable, describe the publication of any fan-charts or uncertainty bands around the forecasts/projections.
5 As of April 2022
6 As a percentage of Q4 2021 nominal GDP. Calculated only for domestic currency reserves.
7 As of April 2022
8 As a percentage of Q4 2021 nominal GDP. Calculated only for domestic currency reserves.
9 RP=Reversed purchase (“repo”), RS=RRP=Reversed Sales (“reverse repo”), RT=Reversed transaction (RP or RRP).
10 As of Juy 31, 2022.
11 OT = Outright Transaction, DB = Direct Borrowing, DL = Direct Lending.
12 Discretion of the central bank to expand collateral types, and list of additional collateral types that the central bank can take on a discretionary basis. Also, additional information such as delays required if discretionary collateral changes.
13 Discretion of the central bank to expand collateral types, and list of additional collateral types that the central bank can take on a discretionary basis. Also, additional information such as delays required if discretionary collateral changes.