The board of the Central Reserve Bank of Peru (BCRP) raised its policy interest rate by 25 basis points on Thursday, November 12, from 4.25% to 4.50%, according to Andina. It is the first rate change since September 2025, when it was cut to 4.25%, and the first hike since January 2023, according to the Central Reserve Bank of Peru, policy rate and Lima CPI series. The goal, the bank said, is to bring inflation back to its 1% to 3% target range amid supply shocks, higher inflation expectations and buoyant domestic demand.
The decision comes after inflation in Metropolitan Lima jumped from 4.5% in September to 5.3% in October, its highest level in three years. The BCRP clarified, however, that the hike "does not necessarily imply the start of a cycle of successive increases." This is what the BCRP decided on the policy rate and why.
View the data as a table
| Policy rate | 4.50% |
| October inflation, 12 months | 5.3% |
| Inflation excluding food and energy | 4.6% |
| 12-month inflation expectations | 3.1% |
Why the BCRP is raising its policy rate
According to the statement reported by Andina, monthly inflation in October was 0.57% and the annual rate rose to 5.3%, "mainly due to food and energy." Inflation excluding food and energy, which the bank uses to gauge the trend, went from 4.5% to 4.6%. Twelve-month inflation expectations reached 3.1%, "slightly above" the ceiling of the target range, and that is what worries a central bank most: that companies and households start setting prices and wages with higher inflation in mind.
The bank cited as risks the El Niño phenomenon and tensions in the Middle East, which could have longer-lasting effects on prices, and greater financial and oil price volatility. At the same time, it noted that most leading activity indicators show good performance through October and that the terms of trade favor Peru. For the details of the price data, see Peru's October inflation.
The BCRP policy rate since 2022
The 25-point hike is small compared with the 2021-2023 cycle, when the BCRP raised the rate from 0.25% to 7.75% to curb inflation that peaked at 8.8% in June 2022. From September 2023 it cut the rate down to 4.25% in September 2025 and held it there for 14 months. Lima inflation, which was as low as 1.1% in August 2025, has picked up since March 2026:
View the data as a table
| Policy rate | 12-month inflation | |
|---|---|---|
| Jan 22 | 3.00% | 5.68% |
| Apr 22 | 4.50% | 7.96% |
| Jul 22 | 6.00% | 8.74% |
| Oct 22 | 7.00% | 8.28% |
| Jan 23 | 7.75% | 8.66% |
| Apr 23 | 7.75% | 7.97% |
| Jul 23 | 7.75% | 5.88% |
| Oct 23 | 7.25% | 4.34% |
| Jan 24 | 6.50% | 3.02% |
| Apr 24 | 6.00% | 2.42% |
| Jul 24 | 5.75% | 2.13% |
| Oct 24 | 5.25% | 2.01% |
| Jan 25 | 4.75% | 1.85% |
| Apr 25 | 4.75% | 1.65% |
| Jul 25 | 4.50% | 1.69% |
| Oct 25 | 4.25% | 1.35% |
| Jan 26 | 4.25% | 1.70% |
| Apr 26 | 4.25% | 4.01% |
| Jul 26 | 4.25% | 4.07% |
| Oct 26 | 4.25% | 5.25% |
| Nov 26 | 4.50% | No data |
| Date | Policy rate | Move |
|---|---|---|
| April 2020 | 0.25% | Record low, pandemic |
| August 2021 | 0.50% | Hiking cycle begins |
| January 2023 | 7.75% | Cycle peak |
| September 2023 | 7.50% | First cut |
| September 2025 | 4.25% | Last cut |
| November 12, 2026 | 4.50% | First hike since 2023 |
Source: Central Reserve Bank of Peru, policy rate and Lima CPI series; rate in force at the end of each month, and November 2026 per the announcement on the 12th. To compare with the region's other central banks, see the ranking of interest rates in Latin America; BCRP president Julio Velarde received an A grade from Global Finance this year.
What the BCRP rate hike means for loans and savings
The policy rate is the BCRP target for the overnight interbank lending rate, and it acts as a floor for other sol interest rates. When it rises, banks tend to make new consumer, mortgage and business loans more expensive and pay slightly more on time deposits, although the pass-through is neither immediate nor complete. A 25-point hike has a limited effect; what matters is whether the BCRP keeps raising. For November household finances, see also when the CTS severance deposit is made.
When the BCRP decides next
The board's next Monetary Program meeting will be on December 10, 2026. The BCRP said it will monitor core inflation, expectations, activity and the duration of supply shocks to assess "additional adjustments," and it projects inflation will return to around 2% once those shocks fade.
- Sep 2025Last cut: 4.25%
- Mar 2026Inflation jumps to 3.8%
- Aug 2026Inflation at 4.4%
- Oct 2026Inflation at 5.3%, a three-year high
- Nov 12, 2026BCRP raises the rate to 4.50%
- Dec 10, 2026Next decision
Frequently asked questions
What is the BCRP policy rate?
4.50% since November 12, 2026, after a 25-basis-point hike.
Why did the rate go up?
Because inflation rose to 5.3% in October and 12-month expectations to 3.1%, above the target ceiling.
What is the BCRP inflation target?
A range of 1% to 3%, with 2% as the midpoint.
When is the next BCRP meeting?
December 10, 2026.
