Uruguay’S Central Bank Holds Steady: Interest Rate Remains At 8.5%

(MENAFN- The Rio Times) The Banco Central del Uruguay (BCU) has decided to keep its monetary policy rate at 8.5%. This decision, made on Tuesday, aims to maintain inflation control and economic stability.

The Central Bank Committee hopes to keep inflation expectations in line with their target range. Uruguay's annual inflation rate dropped to 5.32% in September.

This marks the 16th consecutive month within the target range. The BCU considers this the longest period of stable inflation since implementing their current policy.

Inflation expectations are slowly aligning with the BCU's goals. The 24-month average reached 5.88% in September. This figure is 18 points lower than the previous quarter and falls within the target range for the first time.

The global economy continues to slow down, affecting major economies worldwide. Uruguay has experienced some financial market volatility due to increased risk perception among certain agents. However, the market is adapting to these changes.



Uruguay's economy grew by 3.8% year-on-year in the second quarter. Seasonally adjusted, this growth was 2%. Projections suggest continued economic growth in the coming quarters.

The BCU's Monetary Policy Committee views the current policy as effective. They see inflation hovering around the center of the target range as a positive sign. The gradual convergence of inflation expectations also supports their decision.

Based on these factors, the BCU's Board decided to maintain the policy rate at 8.5%. This rate aligns with their goal of keeping inflation and expectations at 4.5% annually by the end of their policy horizon.

The BCU has held the rate steady at 8.5% since April. Previously, they lowered it from 9% to its current level.

This consistent approach reflects their commitment to economic stability and controlled inflation in Uruguay.

MENAFN09102024007421016031ID1108761016