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CPI rose 0.11% m/m in November, driven by higher prices in food, restaurants and transport. Despite the monthly increase, annual inflation remained stable at 1.4%, within the Central Bank’s target range.

After the fastest monetary tightening cycle in decades (2022-2023), the main central banks have begun a process of lowering interest rates, with the “last mile” characterized by a cautious approach.

National inflation for October was 2.3% monthly (31.3% annually), exceeding estimates. It is the highest monthly value since April, but a reversal is expected in November due to exchange rate stability and the dissipation of electoral uncertainty.

We enter a new data-dependent phase in which the Board monitors core inflation before signaling it may lower the ex-ante real policy rate close to the 2.7% midpoint of its estimated neutral range.

Lima’s Consumer Price Index (CPI) fell 0.10% m/m in October. Despite the decline—driven by lower prices in communications, food, and energy—annual inflation remained virtually stable at 1.4% compared to September, within the Central Bank’s target range.

Consumer prices rose by 2.55% m/m, lower than both consensus (Bloomberg, 2.7%) and our expectation (2.85%), leading to its annual inflation to retreat to 32.9%. We now expect 2025 year-end inflation to be 32.5%, raising upside risks on our 2026 year-end forecast of 23% as well.

Before the meeting, we already saw scope for fewer cuts than the three currently penciled in for 2026. Following today’s meeting, we now hold a stronger bias toward fewer rate cuts ahead.