Peru holds rates at 4.25% despite 4.5% inflation, warns of El Niño and Mideast risks

Peru's central bank (BCRP) kept its reference rate at 4.25% for over a year, even as inflation runs at 4.5%, above target. The bank forecasts convergence to 2% but flags El Niño and Middle East tensions as upside risks. The hold suggests a tolerance for above-target inflation, potentially pressuring the sol and complicating disinflation.