The Central Reserve Bank of Peru (BCRP) held its reference rate at 4.25% in August, citing above-target inflation driven mainly by earlier fuel and transport-cost shocks, resilient economic activity and expectations that supply effects will dissipate. The rate has remained at 4.25% since a 25-basis-point cut from 4.50% in September 2025. The BCRP 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%. Year-on-year headline inflation rose to 4.1% in July, while 12-month inflation expectations reached 3.0%, the upper limit of the target range, but headline inflation and inflation excluding food and energy are projected to return to the range and settle around 2% over the forecast horizon. Leading activity indicators remained strong in July, with all surveyed expectations measures in optimistic territory. Global risks moderated as hydrocarbon supplies relatively normalized, although geopolitical and trade uncertainty persists, while the global growth outlook and Peru’s terms of trade remain favorable. The BCRP said it will monitor inflation, underlying inflation, expectations, activity and the duration of supply shocks and adjust the monetary stance if necessary.
Central Bank of Peru2026-08-13
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 August as headline inflation rose to 4.1% in July, driven mainly by earlier fuel and transport-cost shocks, while economic activity remained resilient. It expects inflation to return to target and settle around 2% over the forecast horizon but will adjust its monetary stance if necessary.