- Decision
- Maintain
- Rate change
- 0 bps
- reference rate
- 4.25%
The Central Reserve Bank of Peru (BCRP) held its reference interest rate at 4.25% in its July 2026 monetary programme, saying the decision reflected inflation developments and projections that both headline inflation and inflation excluding food and energy will return to the target range and move to around 2% over the projection horizon as supply shocks fade, even as risks remain from a more intense El Niño event and geopolitical tensions in the Middle East. For implementation, BCRP set the overnight deposit rate at 2.25% and the rate on direct securities and currency repos and Monetary Regulation Credits at 4.75% for the first 10 operations over the previous three months, with additional operations priced by the Monetary and Foreign Exchange Operations Committee and potentially at higher rates depending on amounts. In June, 12-month inflation rose to 4.0% and inflation excluding food and energy to 4.5%, while 12-month inflation expectations eased to 2.8% and remained within the target range; the central bank said leading indicators through June continued to show good economic performance, with current conditions improving and all expectation indicators in optimistic territory. Externally, BCRP said terms of trade remain favourable for Peru, while global risks have moderated recently on easing Middle East tensions and a relative normalisation in hydrocarbon supply that has pushed international oil prices lower, although geopolitical uncertainty persists; it said it remains especially attentive to incoming inflation, inflation expectations, activity and the duration of supply shocks and stands ready to adjust the monetary policy stance if needed.
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.