Skyline at night in Uruguay

Uruguay Monetary Policy September 2020

Uruguay: Central Bank stands pat in September

At its meeting on 24 September, the Monetary Policy Committee of the Central Bank of Uruguay left the overnight interest rate—the newly implemented monetary policy rate—unchanged at 4.50%. while also keeping unaltered the inflation target band of 3.0%–7.0% for the coming 24 months, as well as the target range of 3.0%–6.0% from September 2022.

The Bank’s decision to hold the rate steady came against a more uncertain economic backdrop. Despite the domestic economy having started to show signs of recovery after the fallout caused by the coronavirus pandemic in the first half of the year, uncertainty over the pace of recovery has intensified due to the challenging regional and international economic situation amid surging new virus cases. Thus, maintaining an accommodative stance avoids any restriction on economic activity and ensures liquidity in the financial system. Turning to inflation, although price pressures softened somewhat in August compared to the previous month (August: 9.8%; July: 10.1%) on more subdued movement in the tradable sector, they still remained elevated. Hence, the decision to stand pat chiefly reflected the need to sustain the economic recovery, despite high inflationary pressures.

With regard to forward guidance, the Bank reiterated its more hawkish tone from the previous meeting, stating in its communiqué that it would gradually move to a tighter policy stance as the economy recovers from the coronavirus shock.

The next monetary policy meeting is scheduled for 5 November.

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest