Peru's central bank tightens reserve requirements for fourth time this year

LIMA, Oct 30 (Reuters) - Peru's central bank tightened reserve requirements on Tuesday to control high liquidity and a rapid credit expansion as low interest rates abroad have encouraged investments in Peru's emerging economy. The new rules, which go into effect November 1, raise reserve requirementson foreign and local currencies 0.75 percentage points, slightlymore than the 0.50 increase the bank put in place three times this year. "This measure seeks to preventatively act to moderate the rate of credit expansion at a time of high liquidity abroad and exceptionally low interest rates in international markets," thebank said in a statement. The local sol currency has been trading around its highest level in more than15 years as the central bank has been intervening in the local currency spot market daily to control its gains against the dollar. The monetary authority has held its benchmark interest rate at 4.25 percent for the past 17 months