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5h ago

Peru Central Bank Keeps Reference Rate at 4.25% Despite 4.5% Inflation

The bank said recent price rises reflect fuel and electricity shocks and held the rate because it will only tighten policy if those shocks prove persistent.

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BCRP mantiene tasa de referencia en 4,25% por más de un año pese a inflación de 4,5%
BCR mantiene tasa en 4,25% y espera que inflación vuelva al rango meta: ¿qué riesgos enfrenta Perú?

Overview

  • The Banco Central de Reserva del Perú left its reference rate at 4.25% in its October decision after 14 months without change.
  • Annual headline inflation stood near 4.5% in September, driven mainly by higher fuel and electricity prices that pushed up transport costs.
  • Core measures that strip out food, energy and transport remain subdued, with the interannual rate about 1.8%, and 12‑month inflation expectations stayed near 3.1%.
  • Many market analysts had expected a 25 basis point hike to 4.5%, so the hold increased uncertainty about the timing of any future tightening and could influence capital flows.
  • The central bank flagged risks that could make inflation persistent—notably El Niño and Middle East tensions that affect oil prices—and said it will monitor indicators and act if those risks materialize.