LIMA (Reuters) – Peru’s central bank on Thursday raised the country’s benchmark interest rate by 50 basis points to 4.5%, the highest since 2009, as authorities battle persistent inflation that sparked angry protests and rattled centre-left President Pedro Castillo.

The Andean country’s interest rate has risen steadily since the middle of last year, when it was at a low of 0.25% as the world’s No.1. The 2nd largest copper producer rebounded from the impact of the coronavirus pandemic and inflation started to bite.

Peru’s 12-month inflation rate stood at 6.82% in March, the highest in a quarter century, pushed by rising food and fuel prices as well as weakening soil against the US dollar. The central bank’s inflation target is 1% to 3%.

Earlier on Thursday, the government ordered its armed forces to patrol the country’s highways for the next month, amid crippling protests across the country over rising food and fuel prices.

The South American country has been plagued by roadblocks for more than a week as anger flared over rising costs, which have soared since Russia’s invasion of Ukraine.

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(Chart: Peru Interest Rate – https://graphics.Reuters.com/PERU-ECONOMY/klvykjoabvg/chart.png)

(Reporting by Carolina Pulice and Marcelo Rochabrun; Editing by Sam Holmes and Richard Pullin)

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