Central Bank of Peru keeps rates unchanged in December

Latest bank decision: At its meeting in December, the Central Bank of Peru (BCRP) decided to keep the policy interest rate at 5.00%, following rate cuts since mid-2023 worth 275 basis points.

Key drivers: The Bank’s move was likely aimed at assessing the impact of prior rate cuts before embarking on further monetary easing. The Bank judged that economic activity was close to potential, meaning there was no rush to cut rates further.

More monetary easing ahead: Forward guidance was open-ended, though the Bank suggested it was nearing the neutral interest rate—pointing to only mild monetary easing going forward. All of our panelists see further rate cuts between now and end-2025, with forecasts ranging from 50 to 100 basis points. This is in line with projections for inflation to remain comfortably within the Bank’s 1.0-3.0% target range next year.

Panelist insight: On the outlook, Goldman Sachs’ Santiago Tellez said: “We still expect two more 25bp cuts in 2025 (once per quarter) for a terminal rate of 4.5%—with less certainty about the timing, which will likely be constrained by the external backdrop. That said, the hint of a now closed output gap is consistent with the view that the risks to our forecasts are tilted towards the possibility of fewer cuts.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Peruvian interest rate projections for the next ten years from a panel of 26 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Peruvian interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Peruvian interest rate projections.

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