Peru’s Central Reserve Bank left its benchmark interest rate unchanged at 4.25% in May 2026, extending its pause for a sixth consecutive meeting and in line with market expectations. Annual inflation accelerated to 4% in April from 3.8% in March, while core inflation rose to 4.4% from 3.7%, keeping both measures above the bank’s 1–3% target range. The uptick was driven mainly by higher transport fares and fuel costs, reflecting elevated global oil prices amid ongoing tensions in the Middle East.
Despite these pressures, twelve-month inflation expectations edged up only modestly, to 2.8% from 2.5%, and remained within the target band. The central bank continues to project a gradual easing of price pressures, with inflation expected to move closer to 2% in 2027. At the same time, leading indicators point to solid economic activity, even as business sentiment softened somewhat in April. The Board reiterated that it is closely monitoring inflation, inflation expectations, and economic activity, and stands ready to adjust monetary policy as needed to ensure inflation returns to target.
