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Peru Monetary Policy October 2023

Peru: Central Bank cuts rates again in October

At its 5 October meeting, the Central Bank of Peru (BCRP) cut its key policy interest rate to 7.25% from 7.50%, delivering its second consecutive rate cut.

The decision to ease the monetary policy stance further was driven by declining headline and core inflation, stable market inflation expectations, and the Bank’s view that price pressures would continue to trend downward. Moreover, economic indicators remaining pessimistic and hinting at a weak recovery also supported reducing the policy interest rate.

The Bank did not give explicit forward guidance in its press release; it stated that future adjustments to the reference rate would be conditional on new information on inflation and its determinants. Most of our panelists see further rate cuts by year-end in line with an expected decline in inflation. The next monetary policy meeting is scheduled for 9 November.

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