The president of Central Bank of Uruguay (BCU), Diego Labat, anticipated that the inflation may have “some rebound” in the last quarter of the year, although it was considered that it will remain within the target range of between 3 and 6%.
Labat anticipated that the projection of BCU for him CPI in the order of 5.7% over the 24-month horizon, “always within the range.” However, he admitted that in the coming months there may be an increase because there is “a inflation negative basis.”
During a virtual meeting with economic analysts, local financial operators and foreign investors, the president of the BCU He referred to the situation and the strategy of the monetary politics, after the meeting of Copom, where the cut of 50 basis points in the interest rates.
In his speech, Labat highlighted that the CPI At 3.87% it is “in the place where we wanted to be when we set the objectives in 2020.” However, he clarified that “it is a milestone in a much longer process, because the fight against inflation It is not earned.”
When displaying a series of slides on the economic situation, the leader highlighted that “the slowdown in the growth rate of prices is widespread,” including the Underlying inflation and non-tradable, leaving all items “with a tendency to fall.”
At the same time, he highlighted that after a 2020 where Uruguay was above other countries in the region in terms of inflation, today it is only at a higher level than Paraguay. In any case, he clarified that “it is a comparison, our objective is against ourselves and to improve the performance of recent decades.”
Labat defended monetary policy and rate cuts
During the meeting, in which the vice president also participated, Washington Ribeiro, Labat highlighted the four reductions in interest rates during the year and stressed that “monetary policy has been much discussed, but it is increasingly understood,” highlighting that “the yield curve of Letters and bank rates also evolved as expected.”
When referring to the possibility of the end of the cycle of cuts in the TPM, expressed in the statement of the Copom, explained that this situation occurs because “the expectations of inflation They are not yet in the target range.”
However, he highlighted that there were “they are rigid, but there were positive trends and they are at lower levels than the average of recent years,” although he warned: “It is a long and hard process, seeking to align expectations with the target range.”
Source: Ambito
