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UPDATE 1-Peru cenbank cuts key rate, says not necessarily start of easing cycle

cycle@ (Adds quote from bank, context)

LIMA, Aug 8 (Reuters) - Peru's central bank cut the benchmark interest rate to 2.5% amid growing expectations for an economic slowdown in the world's No.2 copper producer, but stressed that its decision does not necessarily mean the start of an easing cycle.

Five out of eight economists polled by Reuters had forecast the 25-basis-point reduction, which follows similar moves by other emerging markets in recent months. The remaining three analysts expected the bank to keep borrowing costs unchanged as it had for more than a year.

The U.S.-China trade war has weighed on Peru's growth prospects, which are tied to its copper exports to Asia. The possibility of early elections due to a stalemate between Congress and the executive branch has also increased uncertainty in one of Latin America's most stable economies.

"This decision does not necessarily imply additional interest rate reductions," the bank said in its statement after its board meeting.

"The board is attentive to new information on inflation and its determinants in order to evaluate adjustments to monetary policy," it added.

The bank noted there had been more volatility in financial markets due to trade tensions in recent days, and said transitory supply shocks have hurt primary activity in Peru.

Last month, the central bank slashed its forecast for economic growth in Peru this year to 3.4% from 4% previously.

Moody's has cut its estimate to 3.2% from 3.7%, and warned on Thursday that President Martin Vizcarra's proposal to hold elections next year instead of in 2021 was a downside risk to growth.

Congress has yet to respond to vote on the proposal. (Reporting by Lima Newsroom; Writing by Mitra Taj; Editing by Sandra Maler)