The Central Reserve Bank of Peru (BCRP) has decided to maintain the benchmark interest rate at 4.25% for the tenth consecutive meeting, thus remaining at its lowest level since April 2022, as detailed by the entity in a statement.
In June, monthly inflation stood at 0.23%, while, excluding food and energy, it was 0.08%. On an annual basis, the general index advanced from 3.9% in May to 4% in June, and core inflation increased by one tenth to 4.5%, still above the target range set by the central bank.
Twelve-month inflation expectations continued to moderate, falling from 2.9% in May to 2.8% in June, now within the inflation interval projected by the BCRP.
"It is projected that both year-on-year inflation and inflation excluding food and energy will return to the target range and be around 2% in the projection horizon, as the effects of supply shocks dissipate," explained the issuing institution.
"However, there is a risk that a more intense El Niño phenomenon and geopolitical tensions in the Middle East will have more persistent effects on inflation," it clarified.
According to the central bank, leading indicators of economic activity continue to reflect a "good performance." Most showed an improvement compared to the previous month, and expectation indices rebounded "significantly," all remaining in optimistic territory.
"Global risks have recently moderated due to the easing of geopolitical tensions [...] and the relative normalization of hydrocarbon market supplies. [...] Global growth prospects [...] for this year continue to be positive, and terms of trade remain favorable for the Peruvian economy," summarized the BCRP.