2026/01/09 | Andrés Pérez M., Vittorio Peretti, Andrea Tellechea & Ignacio Martínez
At its January monetary policy meeting, the Central Bank of Peru (BCRP) kept the benchmark rate at 4.25% for the fourth consecutive month, in line with broad market expectations. The forward guidance remained unchanged and data dependent. Notably, the statement again omitted the reference indicating that the policy rate was very close to its estimated real neutral level.
The assessment of domestic conditions was virtually unchanged, reiterating the positive inflation outlook (projecting headline inflation to return to the 2% target in the coming months) and economic activity close to potential, with most business sentiment indicators still in positive territory, although no longer improving compared to the previous month.
The statement dropped any mention of global trade tensions, though it noted that the global growth impulse in 2025 will be “somewhat lower” than expected.
The macroeconomic expectation survey, released today, showed that the 12-month inflation expectation slightly fell from 2.2% to 2.1% in December. The ex-ante real interest rate sat at 2.2%, only marginally above the estimated neutral rate of 2.0%.
Although not mentioned in the statement, the BCRP has continued to purchase dollars in the spot market, with purchases totaling USD 2.7 billion since early November, in the context of the swift currency appreciation in recent months.
Our take: The balance of risks for inflation remains tilted to the downside, particularly if favorable exchange rate dynamics and low oil prices persist. We believe the Central Bank is in the fine-tuning stage of the cycle and is likely to cut the policy rate by 25 bps in 1Q26, ending the cycle at the nominal neutral rate of 4%. Reserve purchases are likely to continue, as record-high terms of trade pressure the currency towards further appreciation. The next monetary policy meeting is scheduled for February 12.
