Peru | BCRP surprises the market again, this time with a pause in June

In its June decision, the Board of the Central Bank decided maintain the reference rate at 5.75%. The monetary policy stance, understood as the real ex-ante reference rate, remains in restrictive territory.

Key points

• Key points:
• The policy rate now stands at 3.19% in real terms (May: 3.13%).
• The Bank noted that the monthly inflation observed in May is mainly explained by the reversion of supply shocks that affected some foodstuffs.
• The authority expects inflation to remain close to the centre of the target range (2% +/- 1%) in the following months.
• One year ahead inflation expectations decreased from 2.62% in April to 2.56% in May.
• At BBVA Research we anticipate that from now on inflation will remain within the target range and, together with the incipient recovery of economic activity, will give the Central Bank room to implement additional cuts to the policy rate in the coming months, although probably with some extra pauses.

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