Banco Central de Reserva del Perú (BCRP) kept its reference rate at 4.25% on Thursday 13 August 2026, its 11th consecutive hold since lowering the rate to that level in September 2025.
Annual inflation rose to 4.1% in July from 4.0% in June, above the central bank’s 1–3% target range, while inflation excluding food and energy increased to 4.6% from 4.5%. Monthly inflation was 0.29% in July, reflecting higher prices for some foods and increased domestic transport fares during the Fiestas Patrias holiday period.
The BCRP attributed the deviation from its target range mainly to higher fuel prices and their effect on transport costs in March and April. Excluding transport, core inflation stood at 1.7% year on year and has remained below 2% since April 2025.
EXPECTATIONS AT TOP OF RANGE
Twelve-month inflation expectations rose to 3.0% in July from 2.8% in June, reaching the upper limit of the target range. The central bank projected that both headline and core inflation would return to the target range and settle around 2% over the projection horizon as the effects of supply shocks fade.
It warned, however, of a risk that a stronger El Niño and geopolitical tensions in the Middle East could have more persistent effects on inflation.
GLOBAL RISKS MODERATE
The BCRP said global risks had moderated recently owing to a relative normalisation of supplies in the hydrocarbons market, although uncertainty persisted over the outcome of negotiations in the Middle East. It added that leading indicators of domestic economic activity to July continued to show good performance, and that Peru’s terms of trade remained favourable.