No Rate Hikes For Now

BMI View: El Salvador's weak recovery is keeping a lid on headline inflation, although rising global food and oil prices are starting to push these components of the consumer price basket towards uncomfortably high levels. We expect the imperative of boosting economic activity to keep the central bank on the back foot for the time being, but caution that rate hikes are in the pipeline later in 2011 should food price pressures persist.

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