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 es
Central Bank of Peru2026-07-09
Central Reserve Bank of Peru Holds Reference Interest Rate at 4.25%
The Central Bank of Peru held its reference interest rate at 4.25% in its July 2026 monetary programme, citing projections that headline inflation and inflation excluding food and energy will return to the target range and converge to around 2% as supply shocks fade, while flagging risks from a more intense El Niño event and Middle East geopolitical tensions. The central bank said June 12-month inflation rose to 4.0%, inflation excluding food and energy to 4.5% and inflation expectations eased to 2.8%, and set the overnight deposit rate at 2.25% and the rate on direct securities and currency repos and Monetary Regulation Credits at 4.75%.