The increase was driven mainly by deposits in the banking system, which grew by 27.7% per month.
He Central Bank of Uruguay (BCU) published his Monetary Balance for February 2023, where he communicated the values and variations of the main elements of monetary policy. One of them, the monetary basethat increased by 3.54% the last month.
That means that the money in circulation increased in those proportions during that period. This is surprising news, taking into account that the government had been carrying out a contractive policy, consistent with the high interest rates –recently frozen at 11.5%–, with the aim of slowing down inflation and bringing it closer to figures to the target range established for this year.
Based on this, the expansion of the monetary base is not exactly an anti-inflationary phenomenon. In any case, the Consumer Price Index (CPI) returned to show some convergence with the objectives established by the Ministry of Economy and Finance (MEF) and lowered its interannual variation to 7.55% in February.
In the disaggregated data, a rise in the same direction can be seen in the emission outside the BCUwhose variation in the same period showed a small balance in favor of 0.87%. However, the real impetus was in the deposits in the banking systemwho grew a 27.7% monthlyparticularly in the overnight deposit segment, which went from representing 32 million dollars to 10,085 million dollars, 315 times more.
Net reserves grew for the second time in the year
According to the BCU report, net reserves measured in dollars grew by 1.9% in February, after doing it 2% in January. So, so far this year, increased a 4.1% Strictly speaking, the 15,447 million dollars of the first month others added $294 million.
The increase occurs after a cumulative drop of -10.8% in 2022. Meanwhile, of the 15,120 million dollars that existed at the end of December of last year to now, 621 million dollars were added in two months, up to reach the 15,741 million current dollars.
In the disaggregated data, the BCU balance shows that 346 million dollars entered for transactions and 53 million dollars left for “other flows.”
The reserve assetsaccording to the International Monetary Fund (IMF), are those foreign assets that are immediately available and that are controlled by the monetary authorities to cover the financing needs of the balance of payments, for intervention in the exchange markets with the objective of affecting the exchange rate, and for other related purposes.
Source: Ambito
