LIMA, Jan 9 Reuters Peru39;s central bank trimmed its benchmark interest rate by 25 basis points to settle at 4.75 on Thursday, surprising analysts who expected the country39;s monetary authority to hold the rate steady at 5.

Peru has since September 2023 gradually eased the key lending rate from a high of 7.75 it held through the first part of that year.

In a statement, the central bank said the cut moves the rate to a level it estimates to be neutral while adding future rate adjustments will track new data on inflation and its derivatives.

The bank39;s decision to lower borrowing costs came after December39;s inflation rate inched up by 0.11 monthonmonth, bringing price increases to 1.97 last year within the bank39;s target range of 2 plus or minus once percentage point.

Prices were down from the 3.24 annual inflation rate recorded in 2023 and far below the 8.46 in 2022. December39;s annualized rate was also down from 2.27 the previous month.

Peru boasts one of Latin America39;s lowest benchmark interest rates.

Reporting by Marco Aquino; Editing by Sarah Morland

Source Reuters