The Central Bank of Uruguay (BCU) unanimously raised the monetary policy rate by 25 basis points to 6% to preserve anchored inflation expectations and support convergence to the 4.5% target amid persistent geopolitical and climate-related risks. The rate had declined from 8% in November 2025 to 5.75% by April 2026, including a 100-basis-point cut in January, and was held through August. Annual consumer price inflation rose to 4.7% in September, driven by imported goods, fruit, vegetables and fuel, although the BCU saw no generalized price pressures and expectations remained anchored around the target. Inflation is projected to remain temporarily above target but within the tolerance range before converging over the two-year policy horizon, while economic activity is expected to grow around trend after showing resilience to sectoral and climate shocks. Globally, geopolitical tensions are lifting energy and other tradable-goods prices, prompting higher inflation expectations and interest rates. The BCU said policy remains expansionary and the increase is intended to limit the persistence and broader pass-through of temporary energy and food price shocks.
Central Bank of Uruguay Raises Policy Rate by 25 Basis Points to 6%
The Central Bank of Uruguay unanimously raised its monetary policy rate by 25 basis points to 6% to preserve anchored inflation expectations and support convergence to the 4.5% target. Annual inflation reached 4.7% in September, but the Bank saw no generalized price pressures and expects inflation to converge over the two-year policy horizon.