The Central Bank of Uruguay unanimously held its Monetary Policy Rate at 5.75%, judging the stance appropriate as inflation projections and expectations remain aligned with the 4.5% target over the monetary policy horizon despite below-potential economic activity. Over the past year, it lowered the rate from 8.75% in August 2025 to 5.75% by April 2026, including a 100-basis-point cut in January, and has held it since. Annual inflation was 4.27% in July, while underlying inflation rose moderately without evidence of second-round effects, although persistent services inflation warrants monitoring. Two-year expectations remained aligned with the target, and the labor market was relatively stable. International uncertainty remains elevated amid Middle East tensions and commodity-price risks, with a bias toward higher global inflation and weaker growth. The central bank will monitor international uncertainty and adverse climate risks and adjust policy as needed to anchor expectations and fulfil its mandate.
2026-08-18Central Bank of Uruguay
Central Bank of Uruguay Holds Monetary Policy Rate at 5.75%
The Central Bank of Uruguay unanimously held its Monetary Policy Rate at 5.75%, citing inflation projections and expectations aligned with the 4.5% target despite below-potential economic activity. Annual inflation was 4.27% in July, while persistent services inflation and international and climate risks warrant monitoring.