The Central Bank of Uruguay could define a cut at that level at the Copom meeting, linked to the decrease in inflation.
Interest rates could see a further cut of 75 basis points at the next meeting of the Monetary Policy Committee (Copom) of Central Bank of Uruguay (BCU), according to market projections, in a context where the inflation fell to its lowest level in 18 years.
In this way, if the Copom decides to move forward with that reduction, the Monetary Policy Rate (TPM), which in August went from 10.75% to 10%, would reach 9.25%, a significant reduction within the framework of the contractionary monetary policy of the BCU, although above the CPI and inflation expectations.
The drop of 75 basis points was incorporated by market rates, as the economist stated through his Twitter account. Aldo Lema, who specified that the scenario includes the data of the CPI of 0.2% in August and additional inflationary moderation.
About, Motto added in its analysis that the expectation of a new drop in the MPR incorporated into prices is in line with the corridor suggested by the central bank in its latest Monetary Policy Report (IPoM).
The president of the BCU spoke of a “probable” reduction
The new cut in interest rates at the meeting on October 5, it seems very feasible with a inflation which is below the center of the target range and was admitted by the president of the Central Bank, Diego Labat, who admitted to Reuters that “we can probably lower them in the next session”, something he linked to the trajectory of the CPI.
About, Labat stated that “the inflation “is on the right track” and trusted in a rebound in the economy for next year. “We are very optimistic for 2024, with a GDP growth forecast of 4%,” said the leader, who said he expected a larger harvest. promising.
Along the same lines, last week the president of the BCU He indicated that “there is room” for a new reduction “When appropriate, we went up. Now the inflation falls and allows us to go down little by little,” he analyzed and highlighted that the CPI “is where we expected it to be.”
Source: Ambito
