Peru Economics: BCRP 2Q26 Inflation Report: Upside Risks for Inflation

Research evidence excerpt

Peru Economics: BCRP 2Q26 Inflation Report: Upside Risks for Inflation

IdeaMat 4.25% through the April, May and June meetings noting the real reference rate

sits close to its estimated neutral level (around 2%). The policy communiqués

reiterated a standard commitment to use “necessary actions” to keep inflation

within target — language that has been unchanged since the March report.

Governor Velarde's own remarks were more explicit than the written communiqué in

conveying reluctance to react to the inflation overshoot, stating he does not

currently see the need to hike, while leaving the door open depending on the evolution

of inflation expectations and on the eventual severity of El Niño. On the latter, he

characterized the assumed event as comparable to the 2017 El Niño — “strong but

not extraordinary” — explicitly distinguishing it from the 1982–83 and 1997–98

episodes, both of which coincided with separate global shocks (the Latin American

debt crisis and the Russian crisis, respectively) that he argues exaggerated the

apparent GDP impact attributable to El Niño alone. His estimates are a combined

drag of roughly 0.7–0.8pp on 2026 growth and 0.8–0.9pp on 2027, split across the

two years.

On the exchange rate, Velarde disclosed two FX intervention operations

following the presidential runoff — approximately US$685mn and a subsequent

US$500mn — in response to appreciation pressure on the sol. He attributed part of

this pressure to a structurally strong trade balance (the Bank now projects ~US

$50bn for the year) but declined to characterize it as a durable trend, noting

dependence on “many factors.” The BCRP data show a net FX purchase position of

US$13.2bn year-to-date through 18 June 2026, split between spot and derivative

operations.