The Central Reserve Bank of Peru (BCRP) held its reference rate at 4.25% in October, expecting inflation to return to the target range and settle near 2% over the forecast horizon as supply shocks fade, while flagging persistent risks from El Niño and Middle East tensions. This extended a run of holds at 4.25% dating to October 2025. The BCRP maintained window rates at 2.25% for overnight deposits and 4.75% for initial direct repo and monetary regulation credit operations. Headline and ex-food-and-energy inflation were both 4.5% year on year in September, with the headline rate driven mainly by higher fuel and electricity prices, while 12-month inflation expectations remained slightly above the target range’s upper limit. Leading activity indicators continued to perform well, although survey measures of current conditions were mixed and expectations remained optimistic with some moderation. Global risks remained elevated amid financial-market and oil-price volatility and geopolitical uncertainty, but the global growth outlook stayed positive and Peru’s terms of trade remained favorable. The BCRP signalled possible short-term adjustments as it monitors inflation, expectations, activity and the duration of supply shocks.
Central Reserve Bank of Peru Holds Reference Rate at 4.25%
The Central Reserve Bank of Peru held its reference rate at 4.25% in October, expecting inflation to return to target and converge near 2% as supply shocks fade. September headline and core inflation were both 4.5%, while risks from El Niño and Middle East tensions persisted.