Publications

The Central Bank’s Board decided in September to reduce the policy interest rate from 4.50% to 4.25%. With this, the rate in real terms stands at 2.07%. It emphasized that the current rate is very close to the estimated neutral level.

National inflation in August was 1.9% month-on-month, remaining at the same level as the previous month despite the full impact of exchange rate and interest rate movements at the end of July. This was slightly below analysts' expectations.

The Lima Consumer Price Index (CPI) contracted 0.29% in August 2025, surprising the consensus of analysts. Year-on-year inflation fell to 1.1%, close to the lower limit of the Central Bank's target range. Inflation excluding food and energy rose slightly to 1.8%.

Three developments shaped the Treasury market over the past month: a weak jobs report, a dovish tone from Powell at Jackson Hole, and renewed political pressure stemming from Trump’s push to replace Governor Lisa Cook from the Fed’s Board.

In its August meeting, the Central Bank's Board of Directors held its benchmark interest rate at 4.50%. In real terms, the rate stood at 2.31% , a level consistent with a neutral monetary position.

The absence of new language suggesting increased caution—despite recent core inflation stickiness—indicates that most members remain open to continuing the easing cycle, albeit at the current more gradual pace of 25 bps per meeting.

Consumer Price Index (CPI) increased by 0.23% in July 2025, in line with expectations. As a result, year-on-year inflation remained at 1.7% comfortably within the Central Bank's target range. Core inflation, which excludes food and energy also stood at 1.7%.

A rate cut in September remains a possibility if the labor market proves to be "on the edge" and weakens sharply, but that seems unlikely at this point. For now, "we have a long way to go to really understand exactly how [the tariff-related inflationary effect] will be."