Peru inflation eases in August, remains near 24-year peak

Peru’s consumer prices rose 0.67% in August, the government said on Thursday, a slower pace than in the two previous months but the annualized rate remained near a 24-year peak reached in June.

The rise in prices follows monthly inflation of 1.19% and 0.94% in June and July, respectively, as falling transportation costs offer the Andean country some relief amid rising fuel and food prices.

Annual inflation in the Lima metropolitan region, seen as the national benchmark, reached 8.4% in August, statistics agency INEI said.

Food and drink prices, which have the biggest impact on the inflation rate, rose 1.71% in August. Prices for electricity, water, gas and other fuels accelerated 1.23%, INEI reported.

Transportation prices, meanwhile, fell 0.87% in August amid a drop in global oil prices.

Headline inflation in the eight months through August was at 6.13%, INEI data showed.

Peru, the world’s second-largest producer of copper, has followed a regional trend of monetary policy tightening in response to rising prices.

In August, the central bank raised its benchmark interest rate by 50 basis points for the 13th consecutive month, bringing the rate to a 13-year high of 6.5%.

Neighboring Chile, the world’s top copper producer, is expected to raise its interest rate 75 basis points in September to 10.5%, a central bank poll showed on Thursday.