Peru | Central Bank will maintain pause in the short term

Summary

In its April meeting, the Board of the Central Bank decided to keep the policy rate at 4.75%. The monetary policy stance, understood as the real ex-ante reference rate, remains slightly above neutral.

Key points

• Key points:
• The policy rate now stands at 2.5% in real terms (March: 2.5%).
• The authority expects headline and core inflation to remain close to the centre of the target range (2% +/- 1%) in the following months.
• One year ahead inflation expectations remain at 2.28%, within the inflation target range.
• At BBVA Research, we estimate that in the short term, the Central Bank will keep the monetary policy rate unchanged. The cyclical position of the economy—characterized by the absence of inflationary pressures and economic growth close to potential—along with heightened external uncertainty and a deterioration in global expectations for inflation and activity, suggest that the pause will be maintained.

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