Central Bank of Peru leaves rates unchanged in January

Central Bank holds steady, matching market expectations: At its meeting in early January, the Central Bank of Peru (BNRP) kept the policy interest rate at a 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 remains subdued and below the midpoint of the Central Bank’s 1.0–3.0% target range. In contrast, the BNRP decided not to cut rates as the economy is growing at a healthy rate and inflation is expected to move back towards the center of the target range in the coming months. Elevated international uncertainty further supported the decision to hold.

BNRP could cut rates in 2026: The Central Bank provided no explicit forward guidance on future interest rate moves. Most panelists expect the Central Bank to cut rates slightly this year, though several see the Bank on hold.

Panelist insight: On the outlook, Goldman Sachs’ Santiago Tellez said: “We maintain our base case that the policy rate is likely to remain at 4.25% for the foreseeable future given a largely closed output gap, well-anchored inflation expectations, and a policy stance virtually in neutral territory.”

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