- Decision
- Maintain
- Rate change
- 0 bps
- reference rate
- 4.75%
The Board of Directors of the Central Reserve Bank of Peru (BCRP) kept the policy reference rate unchanged at 4.75 percent at its 13 March 2025 meeting, judging that falling inflation, anchored expectations and activity near potential warranted no further move while it monitors risks. After a 25 bp cut in January 2025, the rate has been steady for two consecutive meetings. The overnight deposit rate was left at 2.75 percent and the rate on security-currency repos and rediscount operations at 5.25 percent for the first ten operations in three months, with higher rates possible on additional transactions. Headline inflation eased to 1.5 percent y/y in February from 1.9 percent in January as food price pressures abated, core inflation dipped to 2.1 percent, and one-year-ahead inflation expectations fell to 2.28 percent, all within the target range; the central bank expects headline inflation to touch the lower bound of that range in March and for core inflation to hover near 2 percent. Forward-looking indicators of economic activity and sentiment remained in optimistic territory for a second month, with output judged close to potential and recent growth firming, although global growth is seen as moderate and financial markets face heightened volatility amid uncertainty over restrictive trade measures. The Board reiterated that any future rate moves will depend on incoming data and stood ready to act to keep inflation within the target band, with the next policy session set for 10 April 2025.
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.