Peru's central bank cites El Niño and Middle‑East tensions as inflation risks

The Central Bank of Peru (BCRP) warned that a potentially strong El Niño event and ongoing geopolitical tensions in the Middle East could push food and fuel prices higher, threatening price stability. The board kept the benchmark interest rate at 4.25% for the eleventh consecutive month, noting inflation at 4% year‑on‑year and a modest decline in 12‑month inflation expectations. The bank said it will monitor climate‑related and external shocks and may adjust policy if risks materialise.

Separately, Peru's National Meteorology and Hydrology Service (Senamhi) reported a 99% probability that the 2027 summer will experience a strong to very‑strong coastal El Niño. Sea‑surface temperatures are already 3‑7 °C above normal along the coast, raising concerns for agriculture, fisheries and related industries. The agency urged authorities and communities to strengthen prevention plans ahead of the expected above‑average rains, especially in the northern and central coastal regions.