Uruguay: Central Bank of Uruguay leaves rates unchanged in July
On 16 July, the Monetary Policy Committee of the Central Bank of Uruguay (BCU) decided to maintain the policy rate unchanged at 8.50% for the second consecutive meeting.
The BCU’s decision aimed to ensure the convergence of inflation and inflation expectations around the midpoint of its 3.0–6.0% target range. Inflation reached 5.0% in June, slightly above the target range center but below its maximum band for the 13th consecutive month. Additionally, in July the average quarterly inflation expectations for the next two years fell to 6.1% . Moreover, the Bank forecasted that average inflation will remain within target in the next 24 months.
The BCU refrained from offering explicit forward guidance, indicating that future decisions will hinge on domestic and international conditions and the alignment of inflation expectations with the target range. Half of our panelists expect the rate to remain at its current level by the end of 2024, while the rest have penciled in a 50 basis point cut.
The next meeting is set for 16 August.