*Peru’s central bank (BCRP) has lowered its benchmark interest rate by 25 basis points to 4.25%. This follows three consecutive decisions to hold interest rates and was the first rate cut since May, when the BCRP announced a reduction of 25 basis points. In a statement explaining its decision, the bank noted that there was monthly deflation of 0.29% in August and that the annual rate excluding food and energy was 1.8% - up from 1.7% in July - and approaching the centre of the 1-3% target range. The BCRP maintained its 2025 inflation forecast of 2.2%. Regarding the wider economy, the statement said that “in August, most indicators of the current situation improved, while forecasts for economic activity registered mixed results”. It said that the economy is running in line with potential but also noted the impact on global growth of restrictive trade measures, which it expects to harm the world economy in the medium term due to increased uncertainty.
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