Central Bank of Uruguay appoints Guillermo Tolosa as president and targets inflation convergence to 4.5% with a plan to lower the goal further

The Central Bank of Uruguay announced that Guillermo Tolosa has assumed the presidency of its board, outlining a policy agenda centred on maintaining the inflation-targeting regime, using the policy interest rate as the main tool, and keeping a freely floating exchange rate. Tolosa set the immediate objective of achieving “decisive convergence” of inflation to the Central Bank’s 4.5% annual target and then reducing the target to align inflation with lower international standards. Tolosa noted that while recent inflation and market expectations are low by Uruguay’s historical standards, expectations have not yet converged to the 4.5% target, requiring a final push to reach and sustain it. He also flagged a legislative, regulatory and supervisory workstream focused on non-financial money transfer firms that publicly attract savings at scale, with higher transparency and monitoring requirements, alongside a renewed emphasis on financial education and access to quality financial advice, while warning against approaches that add excessive bureaucracy or unduly restrict credit and funding channels. He indicated that lowering the inflation target below 4.5% is intended to be pursued during the current government term once convergence to 4.5% is achieved.