Central Bank of Uruguay says Financial Stability Committee found the financial system stable and will keep continuous risk monitoring

The Central Bank of Uruguay reported that the Financial Stability Committee concluded the domestic financial system is stable and able to continue supporting the economy. The assessment cited adequate solvency, liquidity and capacity to absorb adverse shocks after a review of current and potential macrofinancial risks, key vulnerabilities and the system's ability to mitigate them. The review highlighted external risks from persistent geopolitical tensions, global trade fragmentation and tighter financial conditions. It referred to the escalation of the Middle East conflict in the first half of the year, with effects on energy prices, transport and global supply chains, the continuation of the war between Russia and Ukraine, strategic tensions between the United States and China, and ongoing macroeconomic challenges in countries in the region relevant to Uruguay. The committee also examined climate-related issues, the possible occurrence of a high-intensity El Niño event and the development of new financial technologies. Domestically, credit growth was described as moderate, solvency and liquidity levels as adequate, and delinquency ratios as low by historical standards. Stress tests indicated the system is well prepared to absorb hypothetical adverse scenarios. Against that backdrop, the committee reaffirmed its policy of continuously monitoring the identified risks and continuing to coordinate the actions needed to preserve financial stability.