- Decision
- Maintain
- Rate change
- 0 bps
- reference interest rate
- 4.5%
The Board of the Central Reserve Bank of Peru (BCRP) kept its policy rate at 4.50 percent at the 14 August meeting, judging that year-ahead headline and core inflation remain anchored at 1.7 percent, 12-month inflation expectations edged down to 2.2 percent, activity is near potential and most confidence indicators turned more optimistic even as global trade tensions darken the external outlook. Following 25 bp cuts in January and May, the rate has been steady at 4.50 percent for three consecutive meetings. The overnight deposit rate stays at 2.50 percent, while direct security/currency repos and monetary regulation credits carry 5.00 percent for the first ten operations over the past three months, with higher rates possible for additional transactions. The central bank foresees inflation hovering at the lower end of the 1–3 percent target range in coming months before moving toward the midpoint, with core inflation around 2 percent. It notes continued financial-market volatility as global growth prospects weaken amid trade restrictions. The Board will remain data-dependent and stands ready to adjust policy to ensure inflation stays 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.