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PERU: Scotiabank Sees Room For 1-2 Additional BCRP Rate Cuts

PERU
BulletPeruEM BulletEmerging Market News
  • With yesterday’s rate decision, the real interest rate has increased slightly from 2.38% to 2.47%, moving away from the 2.00% level considered neutral. Scotiabank therefore believes that the BCRP would have room to make one or two additional cuts of 25bp.
  • Scotiabank expects the next cut to occur during the second quarter of 2025. For April, it is more likely that the reference rate will be maintained again.
  • Despite the continued reduction in inflation levels - partly due to base effects - uncertainty regarding tariff policies will persist, along with ongoing strength in economic activity indicators. One thing that may encourage the BCRP to cut would be easing by the Fed, which could still take place in May or June, according to the market consensus.
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  • With yesterday’s rate decision, the real interest rate has increased slightly from 2.38% to 2.47%, moving away from the 2.00% level considered neutral. Scotiabank therefore believes that the BCRP would have room to make one or two additional cuts of 25bp.
  • Scotiabank expects the next cut to occur during the second quarter of 2025. For April, it is more likely that the reference rate will be maintained again.
  • Despite the continued reduction in inflation levels - partly due to base effects - uncertainty regarding tariff policies will persist, along with ongoing strength in economic activity indicators. One thing that may encourage the BCRP to cut would be easing by the Fed, which could still take place in May or June, according to the market consensus.