EL7.AI
Central BanksMedium•14 November 2026•
3 min read

Peru’s Central Bank Raises Interest Rates to 4.50% to Counter Inflation Pressures

Key Facts

1The central bank raised its interest rate from 4.25% to 4.50% on November 12, 2026.
2Core inflation rose from 4.5% in September to 4.6% in October.
3Inflation expectations for the next 12 months remained at 3.1%, slightly above the upper limit of the target range.

Peru’s central bank raised its benchmark interest rate from 4.25% to 4.50% on November 12, 2026, its first adjustment in 14 months. The decision was in line with market consensus expectations, according to Scotiabank, citing a Bloomberg survey. It comes as inflation returns to an upward trend, while other price indicators remain more moderate. BBVA attributed the increase to supply shocks, rising inflation expectations and strong domestic demand.

Core inflation, which excludes food and energy, was 4.6% year on year in October, compared with 4.5% in September, according to BBVA Research. On a narrower measure that excludes food, energy and transport, annual inflation was 2.0% in October, at the midpoint of the central bank’s target range, according to Scotiabank. The readings highlight diverging trends among price components: core inflation rose between the two months, while the measure excluding transport remained at the midpoint of the range. It was the third-largest positive monthly increase recorded up to that point in 2026, according to the institute.

Inflation expectations for the next 12 months remained at 3.1%, slightly above the upper limit of the target range, according to BBVA Research. The institution said supply shocks, rising expectations and strong domestic demand were among the factors cited by the central bank in raising rates. The bank also identified risks linked to El Niño and geopolitical tensions in the Middle East, whose effects on inflation could be more persistent. These risks connect domestic pressures with the possibility that external factors could have a prolonged impact, without implying that the bank announced a specific rate path. Inflation expectations and price readings remain among the factors markets will monitor as they assess the bank’s decision.

The central bank said the rate increase does not necessarily mark the start of a series of consecutive hikes, according to Scotiabank. That clarification limits the extent to which November’s adjustment can be viewed as an advance signal of a sustained upward path, despite inflation expectations exceeding the upper limit of the target range. The bank expects inflation to return to its target range over the 2026–2027 forecast horizon. BBVA, by contrast, expects inflation to rise in the coming months, particularly in the first two months of 2027, as the effects of El Niño intensify. The persistence of El Niño and tensions in the Middle East remain risks identified by the bank, while its guidance indicates that the current decision does not require successive hikes.