- Decision
- Raise
- Rate change
- 25 bps
- reference rate
- 4.5%
The Central Reserve Bank of Peru (BCRP) raised its reference rate by 25 basis points to 4.50% for November 2026 to return inflation to its target range amid strong supply shocks, rising inflation expectations and robust domestic demand, following repeated holds at 4.25% between November 2025 and October 2026. It also set the domestic-currency overnight deposit rate at 2.50%. Annual headline inflation rose to 5.3% in October, mainly on higher food and energy prices, while one-year-ahead inflation expectations remained at 3.1%, slightly above the target range’s upper bound. The BCRP expects headline and core inflation to return to the target range and stabilize around its midpoint as supply shocks dissipate, although El Niño and Middle East tensions could prolong inflationary pressures. Leading activity indicators continued to perform well, while survey expectations weakened but remained optimistic. Global risks remained elevated, with volatility in financial markets and oil prices and persistent geopolitical uncertainty, although global growth prospects remained positive and Peru’s terms of trade favorable. The BCRP stressed that the increase does not necessarily mark the start of successive rate rises and said further adjustments would depend on inflation, expectations, activity and the duration of supply shocks.
Rate evolution
Over the period, the Central Reserve Bank of Peru held the reference rate at 4.50% in July 2025, lowered it by 25 basis points to 4.25% in September 2025 after several months on hold, and kept it unchanged through October 2026. The early pause reflected headline inflation and inflation without food and energy of 1.7% in June 2025, one-year-ahead inflation expectations of 2.3% within the target range, and activity around potential, while the September cut followed a temporary fall in headline inflation and the Board’s assessment that the rate was close to neutral.
At its June 11, 2026 meeting, the Board held the reference rate at 4.25%, noting annual headline inflation of 3.9% in May, and maintained it through October as headline inflation reached 4.5% in September, inflation without food and energy stood at 4.5% and 12-month expectations remained at 3.1%, slightly above the target range.
On November 12, 2026, the Board raised the reference rate by 25 basis points to 4.50% to foster inflation’s return to the target range, citing strong supply shocks, rising inflation expectations and robust domestic demand. Annual headline inflation had increased to 5.3% in October, mainly because of higher food and energy prices, while core inflation rose to 4.6% and one-year-ahead expectations remained at 3.1%. The Board continued to project headline and core inflation returning to the target range and stabilizing around 2% as supply shocks dissipated, but flagged the risk of more persistent effects from El Niño and Middle East tensions and stressed that the increase did not necessarily mark the start of successive rate rises.