Peru’s Central Reserve Bank left its benchmark interest rate unchanged at 4.25% in August 2026, extending its pause for an eleventh consecutive meeting. Annual inflation ticked up to 4.1% in July from 4.0% in June, and core inflation rose to 4.6% from 4.5%, both remaining above the 1–3% target range. However, core inflation excluding transportation came in at 1.7% and has stayed below 2% since April 2025. Twelve-month inflation expectations inched up to 3.0% from 2.8%, reaching the upper bound of the target range.
The central bank anticipates that inflation will gradually move back toward 2% as supply shocks dissipate, although a stronger El Niño and renewed tensions in the Middle East present upside risks. At the same time, economic activity remains robust, with business confidence improving and expectations solidly in optimistic territory. On the external front, global risks have eased somewhat amid more normalized hydrocarbon supplies, even as geopolitical and trade-related uncertainties persist.
