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.