## Peru: Selected Issues

_IMF Staff Country Reports, July 15, 2016_

## Source details

**Canonical URL:** [Peru: Selected Issues](https://www.imf.org/en/publications/cr/issues/2016/12/31/peru-selected-issues-44097)

## Other formats

- [Markdown version](/en/publications/cr/issues/2016/12/31/peru-selected-issues-44097/index.md)
- [Structured JSON version](/en/publications/cr/issues/2016/12/31/peru-selected-issues-44097/index.json)
- [Bundle manifest](/en/publications/cr/issues/2016/12/31/peru-selected-issues-44097/bundle-manifest.json)

## Bibliographic details
- Published: July 15, 2016
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781475582741.002

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### Overview
- Comparative analysis of the macroeconomic adjustment in Chile, Colombia, and Peru to commodity terms-of-trade shocks.
- Study conducted in two steps:
  - (1) an analysis of the impulse responses of key macroeconomic variables to terms-of-trade shocks
  - (2) an event study of the adjustment to the recent decline in commodity prices

### Methodology
- Impulse response analysis of key macroeconomic variables to terms-of-trade shocks.
- Event study focusing on adjustment dynamics following the recent decline in commodity prices.

### Key findings
- Flexible exchange rates are important to help with the adjustment to lower commodity prices.
- Policymakers should stay vigilant in addressing depreciation pressures on inflation through tightening monetary policies.
- On the fiscal front, evidence shows that greater fiscal space, like that of Chile and Peru, gives more room for accommodating terms-of-trade shocks.

### Policy implications and recommendations
- Maintain exchange rate flexibility to facilitate macroeconomic adjustment to commodity price shocks.
- Use monetary policy tightening when depreciation pressures risk elevating inflation.
- Preserve or build fiscal space to provide room for accommodating terms-of-trade shocks through countercyclical fiscal actions.

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## Content in this bundle

- **Peru: Selected Issues; IMF Country Report No. 16/235; June 3, 2016**
  - [Peru: Selected Issues; IMF Country Report No. 16/235; June 3, 2016 (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2016/_cr16235.pdf.md){rel="alternate" type="text/markdown"}
  - [Peru: Selected Issues; IMF Country Report No. 16/235; June 3, 2016 (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2016/_cr16235.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2016/12/31/peru-selected-issues-44097_