- Decision
- Maintain
- Rate change
- 0 bps
- reference rate
- 4.25%
The Central Reserve Bank of Peru (BCRP) left its reference rate unchanged at 4.25 percent in its January Monetary Program, citing inflation close to target and economic activity around potential. It set the overnight deposit rate at 2.25 percent and kept the rate on the first 10 direct repo and monetary-regulation credit operations in the last three months at 4.75 percent, with higher rates possible on additional operations. Headline inflation rose to 1.5 percent year on year in December from 1.4 percent in November, core inflation held at 1.8 percent, and 12-month inflation expectations eased to 2.1 percent, all within the target range; monthly headline and core prints were 0.24 percent and 0.45 percent, respectively. The central bank expects year-ahead headline inflation to converge toward the target midpoint in the coming months and projects core inflation to hover around 2 percent, supported by solid leading indicators and optimistic business surveys. It also noted global growth prospects remain moderate and slightly below the 2025 estimate. The board reiterated it will closely monitor inflation dynamics and stands ready to adjust policy if needed to keep inflation within the target band.
Rate evolution
Over the period, the Central Reserve Bank of Peru held the reference rate at 4.50% in July 2025, lowered it by 25 basis points to 4.25% in September 2025 after several months on hold, and kept it unchanged through September 2026. The early pause reflected headline inflation and inflation without food and energy of 1.7% in June 2025, one-year-ahead inflation expectations of 2.3% within the target range, and activity around potential, while the September cut followed a temporary fall in headline inflation and the Board’s assessment that the rate was close to neutral.
At its June 11, 2026 meeting, the Board held the reference rate at 4.25%, noting that annual headline inflation eased to 3.9% in May, and on July 9 it again left the rate unchanged as headline inflation rose to 4.0% in June and inflation without food and energy to 4.5%, while expectations fell to 2.8% and activity indicators continued to perform well. In August, the Board maintained the rate as annual headline inflation increased to 4.1% in July, inflation without food and energy reached 4.6%, and 12-month inflation expectations rose to 3.0%, the upper limit of the target range. On September 10, it again held the rate at 4.25% as annual headline inflation rose to 4.4% in August, mainly because of a base effect, while inflation without food and energy declined to 4.5% and 12-month expectations increased to 3.1%, slightly above the target range. The Board projected both inflation measures would return to the target range and settle around 2% as supply-shock effects dissipated, but flagged risks from a more persistent El Niño and Middle East tensions and said it remained attentive to inflation, expectations, activity and the duration of supply shocks.