Heteronomics Archive

September 11, 2025

Peru Nears Neutral as Rates Cut to 4.25%

BCRP cut rates by 25bp to 4.25%, approaching neutral policy as August inflation fell to 1.1% YoY, the lowest since 2018, below consensus expectations.
The real ex-ante rate is now 2.07%, very close to the 2% neutral estimate, suggesting limited scope for further easing without overstimulating the economy.
Global trade tensions create a medium-term downward bias for growth outlook, with a data-dependent approach maintained for future policy adjustments.

August 14, 2025

Peru's central bank (BCRP) held rates at 4.5% as expected, maintaining a cautious stance despite well-anchored inflation at 1.7% within the target range.
Global trade uncertainty weighs on the outlook, but future cuts are conditional on inflation data and external conditions affecting the economy.
The real rate is slightly above neutral, providing limited scope to ease, with a terminal rate around 4.0-4.25% reached by early 2026.

December 12, 2024

Peru's central bank (BCRP) held the reference rate at 5.00%, meeting consensus expectations, as inflation and core inflation remained within the target range despite a base effect-driven rise in year-on-year rates.
Inflation expectations were stable at slightly below 2.5%, with global inflation declining more slowly and geopolitical and trade risks adding uncertainty to the outlook.
Future monetary policy will depend on incoming data, particularly trends in core inflation, inflation expectations, and economic activity, with the BCRP maintaining a vigilant, data-dependent approach to ensure inflation stability.

November 07, 2024

The Central Reserve Bank of Peru reduced its reference rate by 25 basis points to 5.00%, in line with consensus expectations, while declaring the real interest rate as close to neutral.
October inflation data showed minor changes, with year-on-year headline inflation rising to 2.0% and core inflation falling to 2.5%. Although it expects inflation to stay within the target, there may be a temporary uptick due to base effects.
Future rate decisions will remain data-driven, with the BCRP monitoring inflation determinants and external economic risks such as global market volatility, geopolitical issues, and China's growth uncertainties.