The Central Bank of Uruguay published remarks by its president, Guillermo Tolosa, from a speech to the Uruguayan Marketing Directors Association calling for firms and households to internalise the central bank’s 4.5% inflation objective and consolidate a lower-inflation paradigm aimed at supporting local-currency credit and investment. He said Uruguay has met the central bank’s inflation goals for the first time in two decades, which he framed as a credibility milestone and the start of a new macroeconomic reality. Tolosa attributed the shift to a stronger currency, an anchored inflation-targeting regime, a robust external position, historically high reserves, and diversified trade and institutions that help buffer global shocks. He pointed to reduced sensitivity of inflation to US dollar movements and relatively better performance of the Uruguayan peso during a recent episode of financial stress as evidence of a regime change, and described the monetary policy interest rate as an effective instrument. He argued that planning and pricing decisions based on 4.5% rather than 6% inflation would lower the need for policy rate increases and reduce costs to the economy.
Central Bank of Uruguay 2025-06-10
Central Bank of Uruguay president calls for economy to adapt to 4.5% inflation objective after meeting targets for first time in two decades
The Central Bank of Uruguay's president, Guillermo Tolosa, emphasized the importance of firms and households internalizing the bank's 4.5% inflation target to support local-currency credit and investment. He highlighted Uruguay's achievement of its inflation goals for the first time in two decades as a credibility milestone, attributing this to a stronger currency, anchored inflation-targeting, and robust external positions. Tolosa noted reduced inflation sensitivity to US dollar movements and advocated planning based on the 4.5% target to minimize policy rate hikes and economic costs.