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Uruguay Monetary Policy April 2024

Uruguay: Central Bank cuts policy rate in April

On 10 April, the Monetary Policy Committee of the Central Bank of Uruguay (BCU) cut the policy rate to 8.50% from 9.00%, following February’s hold.

A sustained decline in inflation, its persistence within the target range and the gradual decline of inflation expectations were behind the decision. Inflation came in at 3.8% in March, its tenth consecutive month within the BCU’s 3.0-6.0% target range. Meanwhile, two-year-ahead market inflation expectations remained at 6.0%. As such, the Bank decided to resume its easing cycle.

In its communiqué, the BCU did not include explicit forward guidance; however, it stated that the policy stance would remain focused on guiding inflation towards 4.5%—the middle of the target range. Our panelists expect the BCU to cut interest rates further this year.

The next meeting is set for 16 May.

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