The Central Reserve Bank of Peru (BCRP) raised its reference rate by 25 basis points to 4.50% for November 2026 to return inflation to its target range amid strong supply shocks, rising inflation expectations and robust domestic demand, following repeated holds at 4.25% between November 2025 and October 2026. It also set the domestic-currency overnight deposit rate at 2.50%. Annual headline inflation rose to 5.3% in October, mainly on higher food and energy prices, while one-year-ahead inflation expectations remained at 3.1%, slightly above the target range’s upper bound. The BCRP expects headline and core inflation to return to the target range and stabilize around its midpoint as supply shocks dissipate, although El Niño and Middle East tensions could prolong inflationary pressures. Leading activity indicators continued to perform well, while survey expectations weakened but remained optimistic. Global risks remained elevated, with volatility in financial markets and oil prices and persistent geopolitical uncertainty, although global growth prospects remained positive and Peru’s terms of trade favorable. The BCRP stressed that the increase does not necessarily mark the start of successive rate rises and said further adjustments would depend on inflation, expectations, activity and the duration of supply shocks.
Central Reserve Bank of Peru Raises Reference Rate by 25 Basis Points to 4.50%
The Central Reserve Bank of Peru raised its reference rate by 25 basis points to 4.50% for November 2026 amid supply shocks, elevated inflation expectations and robust domestic demand, with annual headline inflation reaching 5.3% in October. The bank stressed that the increase does not necessarily mark the start of successive rate rises.