- Decision
- Maintain
- Rate change
- 0 bps
- reference rate
- 4.25%
The Board of the Central Reserve Bank of Peru (BCRP) kept the reference rate at 4.25 %, judging the stance adequate as October headline inflation fell 0.10 % m/m and stayed at 1.4 % y/y, while core inflation held at 1.8 %, both within the 1–3 % target range, amid economic activity near potential and broadly optimistic sentiment indicators. After cutting the rate by 25 bp in May and a further 25 bp in September, the BCRP has maintained 4.25 % for two consecutive meetings. Supporting its stance, the overnight deposit rate remains 2.25 %, and direct security/currency repo and rediscount operations are priced at 4.75 % for the first ten transactions in the past three months, with higher rates possible on additional operations. One-year-ahead inflation expectations were steady at 2.2 % in October, and the Bank anticipates headline inflation will converge to the midpoint of its target while core inflation stays near 2 %. Externally, the authorities flagged continued downside risks to global growth from restrictive trade measures. The Board reiterated its readiness to adjust policy if incoming data on inflation, expectations or activity warrant.
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.