Central Reserve Bank of Peru Holds Reference Rate at 4.25% in June 2026

The Central Reserve Bank of Peru (BCRP) held its reference rate at 4.25% in June 2026, judging that inflation remains above the target range but is largely driven by temporary supply-side factors, while economic activity indicators continue to point to sound performance; the reference rate has been unchanged at 4.25% since the 25 bp cut in September 2025 from 4.50%. For domestic-currency window operations, the overnight deposit rate was kept at 2.25% and the direct security/currency repo and rediscount rate at 4.75% for the first 10 operations in the last three months, with additional operations priced by the Monetary and Exchange Operations Committee and subject to higher rates depending on amounts. In May, monthly headline inflation was -0.16% and core inflation 0.09%, with annual headline inflation easing to 3.9% from 4.0% and core inflation steady at 4.4%, both above the target range, while one-year-ahead inflation expectations rose to 2.9% from 2.8% but remained within the target range; BCRP expects headline and core inflation to return to the target range within the forecast horizon and stabilize around 2% in 2027 as supply shocks dissipate. Leading indicators for May continued to show sound performance, with most current situation and expectations indicators in optimistic territory and most expectations indicators recovering. Globally, BCRP said risk remains elevated because of the conflict in the Middle East, reflected in high financial market volatility and internati