- Decision
- Maintain
- Rate change
- 0 bps
- reference rate
- 4.5%
Peru’s Central Reserve Bank maintained its policy rate at 4.50 % at its 10 July meeting, judging the current stance appropriate as year-on-year headline and core inflation both held at 1.7 % in June—near the lower bound of the 1 %–3 % target range—while 12-month inflation expectations stayed at 2.3 %. After a 25 bp rate cut to 4.50 % in May, the Board has left the benchmark unchanged in June and July. The overnight deposit rate was kept at 2.50 %, and direct repos and monetary-regulation credits will continue at 5.00 % for the first 10 operations in the past three months, with higher rates possible for additional transactions at the discretion of the Monetary and Exchange Operations Committee. The Bank expects headline inflation to remain near the lower edge of the target in coming months before moving toward the midpoint, with core inflation seen around 2 % over the forecast horizon. Although most current-condition and expectation indicators of economic activity worsened in June, they largely remain in optimistic territory and output is assessed near potential. Externally, the Board highlighted a deterioration in global growth prospects and persistent financial-market volatility stemming from trade tensions, particularly in the United States. The Board reiterated that any future rate moves will depend on incoming data on inflation, expectations and activity and pledged to act as 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.