He Monetary Policy Committee (Copom) of the Central Bank of Uruguay (BCU) will resolve this week the future of the interest ratecurrently at 11.25%, in a context of high expectations that it will have a new low, favored by the results of the fight against inflation.
The Copom meeting on Thursday will take place the day after the National Statistics Institute (INE) spread the Consumer Price Index (CPI) of June. Analysts estimate that it will show a drop in inflation, following the downward path started in May when the monthly variation was negative: -0.01%.
The BCU has placed the breakeven rate at 2% above inflation. Currently, with an annualized CPI of 7.10%, this rate would be located at 9%, well below the current Monetary Policy Rate (MPR).
The expectation of financial observers regarding the announcement of the BCU on Thursday ranges from a moderate decrease of 0.25 points to one of 0.50.
Uruguay initiated the decrease in interest rates alone last April, when the TPM fell by 0.25 points to 11.25%. Chili and Brazil they would be added in the coming months, according to the Reuters agency.
The contractive policy of the BCU, in tune with the big central banks, such as the Federal Reserve and the European, and with the partners of the region, has been maintained by the government as the main point of containment of the inflationary crisis.
However, this contributed to an important dollar depreciationgenerating discomfort first in the agriculturewhich since January has been calling for a correction in the exchange rate, to currently reach almost all the main sectors of economic activity.
The drop in exports reported yesterday by the government agency Uruguay XXI which estimated the semi-annual drop at 18%, driven by the dismal performance of soybeans and meat, is also mentioned by analysts as a reason for pressure on the BCU to reduce its TPM.
Source: Ambito