The president of the Central Bank of Uruguay (BCU), Diego Labat, said this Thursday at the traditional lunch of the Association of Marketing Managers (ADM) that the current level of inflation It represents the result of the objective set by the organization in 2020, although it clarified that “the task is not finished.” It was within the framework of his presentation called “Low inflation as a pillar of growth”.
In his presentation, the president of the BCU reviewed the way in which the monetary authority has managed to inflation is located at the current level of 4.79% year-on-year as of July this year, within the target range located between 3% and 6%. “Inflation is where we expected it to be in 2020, the objective for which we have worked. This is part of what the Central Bank has done, but it is also part of the line that economic policy and the government have followed. It seemed that in Uruguay this was not viable, but it can be done”, emphasized Labat.
The hierarch centralized his message in the fulfillment of the inflation targetsfrom the adoption of a regime of goals and the use of the interest rate as a monetary policy instrument. In this way, when inflation exceeds the ceiling of the range, the rate increases; and when it is below, the rate decreases, explained Labat.
He also added that the country stands out for having good social stability and that “we have to take care of it.” “The inflation baja is a tool that aims to have better levels of coexistence, Uruguay In that sense, it has a brand and those things help the country’s strategy,” he said.
The president of the monetary house summarized it in three points: sound financial system, a better payment system and sustainable finance. “The task is not finished, but we are in the place where in 2020 we said we wanted to be. The best contribution that the BCU can make to the growth of the Uruguay is a inflation down,” he concluded.
Likewise, and beyond the fact that it has been possible to maintain the inflation In the target range, there are sectors such as business that still have higher numbers, above 8%, Labat acknowledged. Despite this, he stressed that the values are still below previous years.
projections
The projection of the Central Bank to 24 months is that the inflation is located at 5.3%, remaining in the same way within the range, explained Labat. Refering to interest ratethe expectation is that it will continue to decline, he added, although he clarified that it will depend on whether the inflation stay at current levels.
Regarding growth, the economist was emphatic: “Uruguay It will grow little, but it will grow”. He estimated that next year it will be one percentage point and by 2024, around 4%.
With respect to dollar, Labat acknowledged criticism from the export sector that mentions the exchange rate delay, although he defended the “floating exchange” regime currently used, without this having to mean giving up intervention.
The president of the BCU also referred to some actions implemented by the Central Bank for the functioning of the economy. Among them he mentioned a greater solidity of the financial system, the strengthening of the payment system and the development of sustainable finance.
Dependence with Argentina
For Labat it is good news that currently the Uruguayan economy does not depend on Argentina. As he said in his speech, “this is expressed in the fact that when there is noise in Argentina, as happened the day after at PASSED, in Uruguay the dollar moved only a little and the next day it returned to its normality”. The president of the BCU considered it a “structural change that the Uruguayan economy has had in the last 25 years”.
Labat was accompanied at this ADM luncheon, among others, by the Secretary of the Presidency, Alvaro Slim, and the secretary Rodrigo Ferres; the minister of Economy and Finance (MEF), Azucena Arbeleche; and the director of the Office of Planning and Budget (OPP), Isaac Alfie.
Source: Ambito
