Peru’s central bank leaves key interest rate unchanged for the sixth month

The Central Reserve Bank of Peru (BCRP) has held its benchmark interest rate steady at 7.75% for the sixth month in a row.

Despite this decision, the bank does not rule out the possibility of future rate increases.

Any adjustments will depend on incoming data concerning inflation and related factors.

In June, Peru’s monthly inflation rate dropped to -0.15%, influenced by lower average prices for food and energy.

Meanwhile, the monthly inflation rate, excluding food and energy, was recorded at 0.14%.

The annual inflation dropped from 7.89% in May to 6.46% in June, and when excluding food and energy, it fell from 5.11% in May to 4.35% in June.

Despite this reduction, the rates remain above the upper limit of the central bank’s inflation target range.

The BCRP anticipates that year-on-year inflation will decrease in the forthcoming months and approximates it will be near its target range of 3% by year’s end.

The bank also acknowledged potential risks related to climatic factors, like the potential effects of the El Niño phenomenon.

Finally, BCRP also held the interest rate for its local currency over-the-counter operations at 5.25% per annum on overnight deposits, which serve as a monetary regulation tool for financial institutions.