Peru's performance -at the end of 2024- marks a distance from other countries in the region in terms of inflation control and monetary stability. In December, total annual inflation was only 1.97%, comfortably within the target range of the Central Reserve Bank of Peru (BCRP), which is between 1% and 3%.

In addition, the Peruvian sol depreciated approximately 1.47% against the U.S. dollar, a significant contrast with currencies such as the Brazilian real (27.42%), the Argentine peso (27.21%), the Colombian peso (13.65%) and the Chilean peso (12.63%). These results reinforce the soundness of the country's monetary policy.

A controlled trajectory

Over the last 20 years, inflation in Peru has remained one of the lowest in Latin America, with an annual average of less than 3%. This stability has been facilitated by the adoption of the explicit inflation targeting regime since 2002, which has strengthened the BCRP's credibility by implementing counter-cyclical policies and modifying the reference rate to keep expectations in check.

Between 2004 and 2014, inflation fluctuated within the target range, standing out as a regional example of economic stability. Starting in 2015, periods of international volatility occasionally pushed inflation above the range, but always within manageable levels.

In 2022, meanwhile, external factors, such as rising food and energy prices, drove inflation to levels of 8.46%, although it has since shown a downward trajectory thanks to monetary adjustments applied in a timely manner.

Stability key

Another key factor has been the stability of the exchange rate. Over the last decade, the Peruvian sol has shown remarkable resilience against the U.S. dollar, compared to other currencies in the region. From an average rate of S/ 3.49 per dollar in mid-2000, it gradually adjusted to a current range, close to S/ 3.85 in 2024, reflecting an environment of moderate depreciation, aligned with economic fundamentals.

At critical moments, such as the political crisis of 2021 and the period of high global inflation in 2022, the BCRP actively intervened in the exchange market, dampening sharp fluctuations and avoiding a major inflationary impact from imported goods.

Future prospects

With a projection of 2% for inflation in 2025, Peru's monetary agency anticipates the consolidation of convergence towards the target range, while the exchange rate is expected to remain stable, supported by growing mining and agricultural exports.

This combination of controlled inflation and exchange rate strength will continue to be a crucial pillar for encouraging foreign investment and sustainable economic growth in the country.

In a context where global volatility persists, Peru's ability to maintain stable macroeconomic indicators not only strengthens its economy, but also its position as one of the most stable and dynamic in Latin America.

Figure 1: Annual evolution of the inflation rate in Peru from 2015 to 2029.

Source: Statista (2025)

Armando Herrera

General Manager Fynsa Peru