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Published on Friday, October 7, 2022 | Updated on Friday, October 7, 2022

Peru | BCRP increases rate and takes the policy stance to a restrictive level

The Board of the Central Bank decided to increase the monetary policy rate from 6.75% to 7.00% in October. The Bank tightened the monetary policy stance understood as the real ex-ante policy rate to a restrictive level.

Key points

  • Key points:
  • The policy rate increased by 25 basis points again and now stands at 2.11% in real terms (September: 1.65%).
  • The Bank explained that the higher inflation observed in September is a result of the increase in the international price of food inputs and fuels.
  • The monetary authority maintained its inflation forecast and expects it to return to the target range (2% +/- 1%) in the second semester of next year.
  • Inflation expectations decreased from 5.1% to 4.9% in September.
  • Given a hawkish position, we consider that additional adjustments to the reference rate will be decided on a meeting-by-meeting basis and be highly dependent on the speed of descent of inflation and its expectations. We do not rule out any additional adjustment to the reference rate in the remainder of the year.

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