- 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 September, citing expectations that inflation will return to target alongside continued strength in leading activity indicators, while supply-shock risks persist. After cutting the rate to 4.25% in September 2025, the BCRP has held it at that level. The central bank maintained its overnight deposit rate at 2.25% and the rate on the first 10 direct repo and monetary regulation credit operations over three months at 4.75%. Annual inflation rose to 4.4% in August, while inflation excluding food and energy eased to 4.5%, and 12-month inflation expectations increased to 3.1%, slightly above the target range’s upper limit. The BCRP projects both inflation measures will return to the target range and settle around 2% as supply shocks fade, although El Niño and Middle East tensions could have more persistent effects. Leading indicators through August remained strong, with current-condition measures improving and expectations staying optimistic despite some moderation. Global risks remain elevated amid financial-market and oil-price volatility and geopolitical and trade uncertainty, although the world growth outlook remains positive and Peru’s terms of trade remain favorable. The BCRP said it is monitoring inflation, expectations, activity and the duration of supply shocks to make short-term adjustments to the monetary policy stance and ensure inflation returns to target.
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.