- Decision
- Maintain
- Rate change
- 0 bps
- reference rate
- 4.25%
The Board of the Central Reserve Bank of Peru (BCRP) left its policy reference rate unchanged at 4.25 % in March 2026, citing year-on-year headline inflation’s rise to 2.2 % in February (from 1.7 % in January) and core inflation’s move to 2.2 %, both still around the 2 % midpoint of the 1-3 % target band, alongside economic activity that “remains around its potential” despite softer confidence indicators. After trimming the rate by a cumulative 50 bp between May and September 2025, the BCRP has held it steady. Operational rates were maintained at 2.25 % for overnight deposits and 4.75 % for the first ten repo and rediscount operations over the past three months, with higher rates possible for additional transactions. One-year-ahead inflation expectations inched up to 2.1 %, and the bank foresees headline inflation hovering near 2 % over the forecast horizon, though temporarily breaching the upper end of the target in coming months owing to climate-related supply shocks, higher international energy prices and gas supply interruptions. Leading indicators up to February continued to show solid performance, but most current-condition and expectation measures slipped while staying in optimistic territory. Heightened global risk from the Middle East conflict is fuelling financial-market volatility and higher oil prices, though world growth prospects and Peru’s terms of trade remain favourable. The Board reiterated its readiness to adjust policy if needed to keep inflation within target and will review the stance again on 9 April 2026.
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.