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Uruguay Inflation August 2023

Uruguay: Inflation falls to lowest level since September 2005 in August

Inflation came in at 4.1% in August, which was down from July’s 4.8% and well within the Central Bank’s 3.0%–6.0% target range. August’s figure marked the lowest inflation rate since September 2005. Looking at the details of the release, prices for food and non-alcoholic beverages increased at a weaker pace in August while prices for clothing and footwear dropped at a sharper pace.

Over-decade low inflation in Uruguay can be attributed to the change in the Central Bank’s monetary framework from 2020, when the Bank switched to using interest rates as the main policy tool to meet the inflation target, as well as the lowering of the upper bound of the target range to 6% from 7% last year.

In addition, the trend pointed down, with annual average inflation coming in at 7.3% in August (July: 7.8%). Lastly, consumer prices rose 0.17% in August over the previous month, swinging from the 0.36% drop recorded in July.

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