Peru Keeps Rates Steady for 11th Straight Meeting

Peru’s Central Reserve Bank kept its benchmark interest rate unchanged at 4.25% in September 2026, extending its pause for a 12th consecutive meeting. Annual inflation rose to 4.4% in August from 4.1% in July, mainly due to a base effect from negative monthly inflation a year earlier, while inflation excluding food and energy eased to 4.5% from 4.6%. Excluding transportation, underlying inflation stood at 1.8% and has remained below 2% since April 2025. Twelve-month inflation expectations increased to 3.1% from 3.0%, slightly above the upper limit of the target range. The central bank expects inflation to return toward 2% as supply shocks fade, although El Niño and Middle East tensions could keep inflation pressures elevated. Economic activity remained strong in August, with all current-conditions indicators improving and expectations staying optimistic, though somewhat more moderate. Global risks remain elevated, reflected in greater financial-market and oil-price volatility.

Peru’s Central Reserve Bank kept its benchmark interest rate unchanged at 4.25% in August 2026, extending its pause for an eleventh consecutive meeting. Annual inflation rose to 4.1% in July from 4.0% in June, while core inflation increased to 4.6% from 4.5%, remaining above the 1–3% target range. However, excluding transportation, core inflation stood at 1.7% and has remained below 2% since April 2025. Twelve-month inflation expectations edged up to 3.0% from 2.8%, reaching the upper limit of the target range. The central bank expects inflation to return toward 2% as supply shocks fade, though a stronger El Niño and renewed Middle East tensions pose upside risks. Meanwhile, economic activity remained strong, with business sentiment improving and expectations firmly in optimistic territory. Global risks have moderated amid more normalized hydrocarbon supplies, although geopolitical and trade uncertainties persist.

Peru’s Central Reserve Bank kept its benchmark interest rate unchanged at 4.25% in July 2026 as widely expected, extending its pause for a tenth consecutive meeting. Annual inflation edged up to 4.0% in June from 3.9% in May, while core inflation rose to 4.5% from 4.4%, remaining above the 1–3% target range. However, monthly headline and core inflation readings were consistent with the target band, as June’s increase was driven mainly by higher fish prices. Meanwhile, 12-month inflation expectations eased to 2.8% from 2.9%, staying within the target range. The central bank expects both headline and core inflation to gradually return to around 2% as temporary supply shocks fade, though it warned that a stronger El Niño and renewed Middle East tensions could keep inflation elevated. Policymakers noted that economic activity remained robust, with business sentiment improving further, while global risks eased somewhat amid lower oil prices, although geopolitical uncertainty persists.