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PERU: Natixis Forecasts Just One Further BCRP Rate Cut This Year

PERU
BulletPeruEM BulletEmerging Market News
  • Natixis says there’s clearly not much room for further interest rate cuts in Peru, both because the level is now close to the neutral range, but also because the Fed's room for cuts is shrinking. This is especially so after the latest NFP and unemployment figures in the US, which point to a still resilient labour market.
  • Natixis estimates that the nominal neutral range in Peru is between 4.1% and 4.6%. Their estimate for the real neutral range is between 1.6% and 2.1% and inflation expectations are around 2.45%.
  • Natixis forecasts only one additional 25bp BCRP rate cut in 2025, which would bring the policy rate to 4.50%. The timing of the cut is difficult to estimate, but they think it could happen in Q2. In 2026, they forecast two additional 25bp cuts, bringing the policy rate to a terminal level of 4.0%.
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  • Natixis says there’s clearly not much room for further interest rate cuts in Peru, both because the level is now close to the neutral range, but also because the Fed's room for cuts is shrinking. This is especially so after the latest NFP and unemployment figures in the US, which point to a still resilient labour market.
  • Natixis estimates that the nominal neutral range in Peru is between 4.1% and 4.6%. Their estimate for the real neutral range is between 1.6% and 2.1% and inflation expectations are around 2.45%.
  • Natixis forecasts only one additional 25bp BCRP rate cut in 2025, which would bring the policy rate to 4.50%. The timing of the cut is difficult to estimate, but they think it could happen in Q2. In 2026, they forecast two additional 25bp cuts, bringing the policy rate to a terminal level of 4.0%.