The Board of the Banco Central de Reserva del Perú (BCRP) announced on March 12 that it has decided to maintain its reference interest rate at 4.25 percent for March.
This decision is significant as it reflects the central bank’s ongoing efforts to manage inflation and support economic stability amid both domestic and international challenges.
According to the BCRP, February saw a monthly inflation rate of 0.69 percent, with core inflation—excluding food and energy—at 0.36 percent. The rise in overall inflation was mainly attributed to increases in water tariffs and certain food prices due to supply factors. Over twelve months, total inflation rose from 1.7 percent in January to 2.2 percent in February, while core inflation also increased from 2.0 to 2.2 percent during the same period.
Expectations for twelve-month inflation edged up slightly from 2.0 percent in January to 2.1 percent in February, remaining near the center of the target range set by the BCRP. The central bank projects that both headline and core annual inflation will stay around two percent over its forecast horizon but anticipates a temporary rise above this level in coming months due to climate-related factors, higher international energy prices, and disruptions in natural gas supply—all expected to have only a short-term impact on inflation.
The BCRP noted that economic activity remains close to its potential level, with leading indicators through February showing continued solid performance despite most current situation and expectations indicators declining during the month but still staying optimistic overall.
Global risks have increased because of conflict in the Middle East, resulting in greater financial market volatility and higher international oil prices; however, global economic growth prospects remain positive for this year and terms of trade continue favorable for Peru’s economy.
The Board stated it remains attentive to new information regarding inflation and its determinants—including underlying inflation trends, expectations, and economic activity—to consider any necessary changes in monetary policy stance going forward. It reaffirmed its commitment “to take necessary actions to keep inflation within the target range.” The next monetary policy meeting is scheduled for April 9.
