2025/08/15 | Andrés Pérez M., Vittorio Peretti, Andrea Tellechea & Ignacio Martínez
At its August monetary policy meeting, the Central Bank of Peru (BCRP) maintained its monetary policy rate at 4.5% for the third consecutive month, in line with our forecast and the Bloomberg consensus. The policy stance remains data-dependent, with no explicit guidance on future moves, as in previous statements.
The BCRP reiterated concerns about the external environment, highlighting restrictive foreign trade measures and elevated uncertainty regarding their impact on the global economy. This backdrop continues to fuel volatility in financial markets. Domestically, the Board expects headline inflation to remain in the lower half of the target range in the near term, before rising and eventually stabilizing around the 2% target. Twelve-month inflation expectations declined slightly to 2.2% in July, down from 2.3% in June, implying a one-year ex-ante real interest rate of 2.3%. Meanwhile, activity indicators suggest that economic momentum remains broadly positive, with output operating near its potential level.
Our Take: The benign inflation outlook, coupled with growth near potential, supports our view that the BCRP remains steadfast on taking the policy rate even closer to neutral. We anticipate one additional 25 basis point rate cut this year, bringing the policy rate to 4.25%. The timing of this move will likely hinge on developments in external conditions. The next monetary policy meeting is scheduled for September 11.