Central Bank of Peru decreases rates in May

Latest bank decision: At its meeting on 8 May, the Central Bank of Peru (BCRP) decided to reduce the reference interest rate by 25 basis points to 4.50%. This took rate cuts since mid-2023 to 325 basis points.

Mild price pressures enable cut: The key factors influencing the BCRP's decision were inflation comfortably within the Bank’s 1.0-3.0% target range, expectations for inflation to remain in target ahead, and a recent deterioration in economic activity expectations.

Further easing is a possibility: Forward guidance was open-ended. Many of our panelists see the Bank on hold for the rest of the year, though some see scope for 25 to 75 basis points of extra cuts.

Panelist insight: On the outlook, Goldman Sachs’ Santiago Tellez said: “Our interpretation of the meeting’s signals has clear dovish implications for our views. We now see the MPC as very much open to delivering at least one more rate 25bp cut, bringing the policy stance slightly below neutrality. While we still believe that the MPC would prefer for further clarity on the Fed funds rate path given the now broadly closed rate differential, the benign domestic inflation backdrop endows it with room to deliver insurance cuts.”

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 27 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.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Peruvian interest rate projections.

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