Peru's central bank (BCRP) is expected to hold its reference rate unchanged at 4.75% on Thursday after cutting in January and by a cumulative 300bps since September 2023, said Scotiabank.

BCRP guided at its last statement that the policy rate "is approaching the level estimated as neutral."

Since it said that, Peru's total inflation rate slipped again to 1.9% year over year and with the core consumer price index at 2.4% and so close to the middle of the 2%, more or less 1% inflation target range.

What may lean toward the risk of a further cut is the inflation data paired with the fact the currency sol (PEN) is a touch firmer to the US dollar (USD) since the last meeting, stated the bank.

What leans to a hold is that Peru's economy grew faster than expected in November gross domestic product which arrived after the January decision, added Scotiabank.