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The Central Reserve Bank of Peru left its benchmark interest unchanged at 2.25 percent at its December 2019 meeting, after trimming it by 25 bps in its previous meeting leaving borrowing costs at its lowest since 2010, amid concerns of an economic slowdown. Policymakers underscored that there is a moderate downside risk for growth due to a subdued domestic demand. The Committee noted that the annual inflation rate remained below the target range at 1.87 percent in November (vs 1.88 percent in October), and it is expected to be around 2 percent on the projected horizon. Policymakers added that they will closely monitor new data to evaluate any adjustments to monetary policy.

The Central Reserve Bank of Peru lowered its benchmark interest by 25 bps to 2.25 percent at its November 2019 meeting. It is the second rate cut so far this year, bringing borrowing costs to the lowest since 2010, amid concerns of an economic slowdown. Policymakers said that the decision does not necessarily imply additional interest rate reductions and added that will monitor new inflation data to take actions if necessary. The Committee noted that the annual inflation rate remained below the target range at 1.88 percent in October (vs 1.85 percent in September), and it is expected to be around 2 percent on the projected horizon, with a downward bias due to the possibility of a slower-than-expected growth in domestic demand.

The Central Reserve Bank of Peru left the benchmark interest unchanged at 2.50 percent at its October 2019 meeting. Policymakers said that it is appropriate to keep its expansionary monetary policy and will monitor new inflation data to take actions if necessary. The Committee noted that the annual inflation rate fell below the target range to 1.85 percent in September from 2.04 percent in August, and it is expected to be around 2 percent on the projected horizon, with a downward bias due to a possibility of a slower-than-expected growth in domestic demand. Policymakers underscored that primary activity has gained steam after a complicated first half of the year, whereas non-primary activity has also picked up, but at a softer rate than expected.

The Central Reserve Bank of Peru left the benchmark interest unchanged at 2.50 percent at its September 2019 meeting, surprising markets who expected a 25bps cut. Policymakers said that the decision remains appropriate and will monitor new inflation data to take actions if necessary. The Committee noted that the annual inflation rate remains within the target range and it is expected to be around 2 percent on the projected horizon, with a downward bias due to a possibility of a slower-than-expected growth in domestic demand. Policymakers underscored that primary activity has gained steam since July after a complicated first half of the year, whereas non-primary activity has also picked up, but at a softer rate than expected.

The Central Reserve Bank of Peru slashed the benchmark interest rate by 25 bps to 2.50 percent at its August 2019 meeting, as the annual inflation rate fell to 2.11 percent in July from 2.29 percent in June to open the window for easing. Policymakers underscored that global uncertainty persists, while domestic public investment decelerated in the first 7 months of 2019. On the inflation front, they mentioned falling expectations. The Committee noted that the 25-bps cut will not necessarily be followed by further easing.

The Central Reserve Bank of Peru kept the benchmark interest rate steady at 2.75 percent at its July 2019 meeting, as widely expected. Policymakers said that the decision is appropriate as the inflation rate is expected to remain within the target range and converge towards 2 percent over the forecast horizon, with a downside bias due to the possibility of a slowdown in domestic demand and added that will pay close attention to new data. The Committee noted a weak performance in primary activity and that the risks concerning global economic activity remained. The annual inflation rate fell to 2.29 percent in June from 2.73 percent in May, mainly due to lower cost of food and non-alcoholic beverages and transport.