Peru’s central bank holds rates steady, sees no need for hikes

Peru’s central bank left its benchmark interest rate unchanged on Thursday, citing stable inflation within target and a balanced growth outlook.

The board of the Banco Central de Reserva del Perú (BCRP) voted to hold the rate at 6.25%, the highest level since 2009, following its latest monetary policy meeting. In a statement, the central bank noted that inflation remains within the target range of 1% to 3%, while economic activity has shown signs of stabilization.

The decision reflects confidence in the disinflationary process, with the bank reiterating that current policy settings are sufficient to ensure price stability. Peru’s inflation rate stood at 3.0% year-on-year in May, near the upper bound of the target range, but within the BCRP’s comfort zone.

The central bank also highlighted a gradual improvement in domestic demand and private investment, though risks from external factors such as global monetary policy shifts and commodity price volatility remain. The BCRP emphasized that future rate adjustments would depend on incoming data, particularly inflation trends and economic activity.

Peru’s currency, the sol, has shown resilience in recent months, supported by a hawkish stance from the central bank and a relatively stable macroeconomic environment. Analysts expect the BCRP to maintain its current policy stance unless inflation pressures re-emerge or growth falters.

The central bank’s decision aligns with broader trends in Latin America, where several monetary authorities have paused rate hikes amid signs of cooling inflation and moderating economic growth.