Inflation target near band led to a surprise cut in the interest rate

Peru surprised economists by cutting interest rates while congress passed a bill allowing workers to withdraw $7 billion from pension funds. Lawmakers and central bankers are trying to jumpstart a moribund economy. Peru's central bank has cut interest rates as inflation nears its target band.

Peru set to keep borrowing costs unchanged for a second straight meeting Thursday. Inflation slowed much less than expected last month to remain above the central bank’s target band. Peru's central bank is set to hold rates unchanged for the second straight week in a row.