Peru's central bank raises benchmark interest rate to 7.25%

LIMA (Reuters) - Peru's central bank increased its benchmark interest rate by 25 basis points to 7.25% on Thursday, as expected, the 16th consecutive hike as monetary policymakers in the copper-producing Andean nation battle stubbornly high inflation.

The benchmark interest rate has risen from a low of 0.25% in July 2021, as annual inflation hit 8.28% as of October.

Peru's central bank confirmed previous guidance, saying it expects inflation to come down to its target band of between 1% and 3% by the second half of 2023.

Peru is the world's No. 2 copper producer and has ranked this century among the fastest growing economies in the region.

Still, concerns about a global slowdown have weighed over the Andean economy.

Peru's finance ministry recently lowered its growth expectations to between 2.7% and 3% from a previous estimate of 3.3%.

(Reporting by Marco Aquino and Sarah Morland; Editing by Anthony Esposito)