Peru cenbank raises deposit requirements to cool credit

LIMA: Peru's central bank said on Sunday it will lift deposit requirements for lenders to help cool credit growth and anchor inflation expectations as the economy booms.

As of March 1, the average deposit requirement on bank accounts denominated in Peruvian soles and dollars will increase 0.25 percentage points.

"This increase seeks to moderate the pace of credit growth in the financial system, in the context of dynamic domestic demand, so that inflation expectations stay anchored in the target range of between 1 percent and 3 percent," the central bank said in a statement.

Peru's central bank has been raising deposit requirements in the last year to ease monetary stimulus. The country's economy grew 8.78 percent in 2010 and could expand another 7 percent this year.

Inflation picked up speed in January, hitting a two-year high of 0.39 percent amid rising global food and energy prices.

The central bank raised its benchmark interest rate in February for a second straight month to curb rising costs.