LIMA (Reuters – Peru’s central banking raised its benchmark rate to 4.5% by 50 basis point on Thursday. It is doing so in an attempt to fight stubborn inflation which has sparked protests from the center-left and upset President Pedro Castillo.

In the middle last year, the Andean country saw its interest rate rise steadily from a level of 0.2%. This was the lowest in the world. The impact of the coronavirus epidemic has been reversed by the second producer and inflation has begun to bite.

The Peru 12-month inflation rate was 6.82% in March. This is the highest level in over a quarter century. It was influenced by rising food and fuel costs as well as the weakening of the sol currency against the U.S. Dollar. The inflation target of the central bank is between 1% and 3%.

On Thursday, the government ordered that its armed forces supervise roads in the country for one month. This was amid protests across the nation over high fuel and food prices.

For more than one week, the roadblockades in South American have been plaguing the country. The blockades are a result of angry citizens who feel they can’t pay rising costs since Russia invaded Ukraine.

(Graphic: Peru interest rate – https://graphics.reuters.com/PERU-ECONOMY/klvykjoabvg/chart.png)