Central Bank of Peru leaves rates unchanged in November

Central Bank holds steady, matching market expectations: At its meeting on 13 November, the Central Bank of Peru (BNRP) kept the policy interest rate at its more than three-year low of 4.25%. The hold was in line with market expectations.

Subdued inflation and robust GDP growth drive wait-and-see approach: A rate hike was not warranted as inflation remained subdued in October, with price growth among the lowest in emerging markets and below the midpoint of the Central Bank’s 1.0–3.0% target range. Additionally, inflation expectations remained well anchored and the Bank sees inflation approaching the target midpoint by the end of the year. In contrast, the BNRP likely decided not to cut rates as the economy expanded at a healthy and faster-than-expected pace in September. Elevated international uncertainty further supported the decision to hold.

BNRP to cut rates in 2026: The Central Bank provided no explicit forward guidance on future interest rate moves. About two-thirds of our panelists project the BNRP keeping interest rates unchanged at the next and final meeting of the year, while the rest expect a 25 basis point cut. Looking at 2026, a majority of our panelists expect the Central Bank to cut rates. The Bank will reconvene on 11 December.

Panelist insight: On the outlook, Goldman Sachs’ Santiago Tellez said: “We maintain our view that the policy rate is likely to remain at 4.25% for the foreseeable future. With a largely closed output gap, well-anchored inflation expectations, and a policy stance virtually in neutral territory, there is limited urgency to either address inflationary pressures or stimulate economic growth.”

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