- Decision
- Maintain
- Rate change
- 0 bps
- reference rate
- 4.25%
The Central Reserve Bank of Peru (BCRP) held its reference rate at 4.25% in June 2026, judging that inflation remains above the target range but is largely driven by temporary supply-side factors, while economic activity indicators continue to point to sound performance; the reference rate has been unchanged at 4.25% since the 25 bp cut in September 2025 from 4.50%. For domestic-currency window operations, the overnight deposit rate was kept at 2.25% and the direct security/currency repo and rediscount rate at 4.75% for the first 10 operations in the last three months, with additional operations priced by the Monetary and Exchange Operations Committee and subject to higher rates depending on amounts. In May, monthly headline inflation was -0.16% and core inflation 0.09%, with annual headline inflation easing to 3.9% from 4.0% and core inflation steady at 4.4%, both above the target range, while one-year-ahead inflation expectations rose to 2.9% from 2.8% but remained within the target range; BCRP expects headline and core inflation to return to the target range within the forecast horizon and stabilize around 2% in 2027 as supply shocks dissipate. Leading indicators for May continued to show sound performance, with most current situation and expectations indicators in optimistic territory and most expectations indicators recovering. Globally, BCRP said risk remains elevated because of the conflict in the Middle East, reflected in high financial market volatility and international oil prices, although the outlook for global growth remains positive and Peru’s terms of trade stay favorable. The Board said it is particularly attentive to incoming information on inflation, core inflation, expectations, activity and the duration of supply shocks, and stands ready to adjust the monetary stance if necessary.
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.