Peru Leaves Interest Rate at 4.25%

Peru’s Central Reserve Bank left its benchmark rate steady at 4.25% in March 2026, maintaining the level for a fifth consecutive meeting, in line with market expectations. The bank highlighted that annual inflation accelerated to 3.8% in March from 2.2% in February, exceeding the central bank’s target range of 1%–3%, amid a surge in oil prices and a domestic natural gas crisis. Despite this, twelve-month inflation expectations increased to 2.5% in March from 2.1% in February, remaining within the inflation target range. However, economic activity remained near potential in March, with leading indicators continuing to show strong performance. Most indicators of current conditions and expectations remained in optimistic territory during the month. The Board reiterated that it remains attentive to new information on inflation and its determinants and, if necessary, will adjust the monetary policy stance.

Peru’s Central Reserve Bank kept its benchmark rate steady at 4.25% in March 2026, maintaining the level for a fourth consecutive meeting, in line with market expectations. The bank highlighted that headline inflation rose to 2.2% in February from 1.7% in January, driven by adverse weather, rising global fuel prices, and a domestic natural gas crisis. Twelve-month inflation expectations edged up slightly to 2.1% from 2%, staying near the center of the target range. The central bank aims for annual consumer price growth of 1% to 3%, with a preference for rates close to the midpoint. Economic activity remains near potential, and February’s leading indicators continued to show solid performance. However, the BCRP cautioned that global risks have risen due to the Middle East conflict, reflected in greater financial market volatility and higher oil prices.

Peru’s Central Reserve Bank left its benchmark rate unchanged at 4.25% in February 2026, holding steady for the third straight meeting, in line with expectations. The bank highlighted that January headline inflation rose to 1.7% (from 1.5% in December) with monthly inflation at 0.10%, while core inflation without food and energy increased to 2.0% (from 1.8%); twelve-month inflation expectations fell to 2.0% in January, comfortably within the target range. Policymakers also cited solid readings in current-conditions and expectations indicators, alongside a global backdrop of growth higher than previously expected and exceptionally favourable terms of trade. The BCRP reiterated that it will continue to monitor inflation dynamics, expectations, and economic activity, and stands ready to adjust policy as needed.