The Central Bank of Uruguay’s president, Guillermo Tolosa, used a conference session on the consolidation of inflation targeting in Latin America to review Uruguay’s experience since adopting the regime in 2020, pointing to improved credibility and price stability. He highlighted that inflation has remained within the target range for more than two years, including through periods of exchange-rate volatility. Tolosa argued that Uruguay entered inflation targeting without traditional preconditions but with a strong institutional commitment that helped build credibility through results. He said inflation has begun to show its own dynamics rather than moving in line with the exchange rate, and noted that over the past three months the gap between private-sector expectations and the target narrowed from 1.5% to 0.4% for analysts and financial markets. He also stressed the role of coordination with government and public communication, including the need for the government to support the 4.5% inflation goal and for the central bank to communicate transparently in accessible language. Looking ahead, he said the central bank will continue working to strengthen the national currency and develop peso capital markets, using regulatory and communication measures aimed at reducing the preference for the US dollar in residents’ portfolios.
Central Bank of Uruguay 2025-08-29
Central Bank of Uruguay president reports inflation-targeting credibility gains and flags steps to strengthen the peso
Central Bank of Uruguay President Guillermo Tolosa reviewed Uruguay's inflation targeting since 2020, noting improved credibility and price stability. Inflation has stayed within the target range for over two years, with a narrowing gap between private-sector expectations and the target. Tolosa emphasized government coordination, transparent communication, and plans to strengthen the national currency and develop peso capital markets.