Peru Interest Rate

Central Bank of Peru leaves rates unchanged in May

Bank holds for eighth consecutive meeting: At its meeting on 14 May, the Central Bank of Peru (BCRP) maintained the reference interest rate at 4.25%. This marked the eighth hold since September 2025.

Energy-price shocks motivate hold: Annual inflation accelerated from 3.8% in March to 4.0% in April, moving further above the Bank’s 1.0–3.0% target range due to supply shocks, notably rising international fuel prices driven by ongoing Middle East conflicts. However, the Bank ruled out a policy rate hike, assessing these supply-side pressures to be temporary. Notably, the Central Bank’s press release omitted previous mentions of the domestic supply shocks that had been lifting inflation in prior months, signaling that these disruptions are easing. Overall, the Bank projects that inflation expectations will remain within the target range over the forecasting horizon despite increasing somewhat recently. Meanwhile, a rate cut was also deemed unnecessary, as economic activity continued to perform well through April. Consequently, the Bank opted to keep rates on hold.

Our panelists continue raising their forecasts: The Central Bank did not provide specific forward guidance. Since last month, our panelists have continued raising their forecasts for the policy rate. A vast majority expects the Central Bank to stand pat through the end of the year, while a minority sees room for cuts and a few anticipate rate hikes. The trajectory of global commodity prices and domestic inflation remains key to watch. The BCRP is scheduled to reconvene on 11 June.

Panelist insight: On the outlook, Goldman Sachs’ Santiago Tellez said: “At this juncture we maintain our base case that the policy rate will remain at 4.25% under our forecasts that both headline and core inflation are now tracking close to their peaks. […] However, we now see a lower hurdle for a shallow hiking cycle. This to the extent that the MPC is growing concerned about the possibility that inflationary pressures are more likely to become entrenched in an environment with a positive output gap and large supply shocks—even if the latter are temporary.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Peruvian interest rate projections for the next ten years from a panel of 28 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Peruvian interest rate.

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