Peru | The monetary pause is extended due to increased uncertainty over trade policies

In its March 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 (February: 2.4%).
• 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 slightly below 2.50%, within the inflation target range.
• At BBVA Research, we anticipate a final 25-basis-point cut to the policy rate soon, before the end of the second quarter, bringing it to what we estimate as the neutral level (4.50% in nominal terms). We also maintain our view that the timing of the cut will depend largely on developments in financial markets.

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