The president of the state body pointed out that the inflationary expectations of market agents decreased.
He president of the Central Bank of Uruguay (BCU), Diego Labatstated that the regime of target inflation (inflation targeting) of the BCU is one “under construction.”
The head of the state body highlighted that, currently, the inflation has been close to the center of the target range for five months and, therefore, the inflationary expectations of market agents decreased, although these are still pending to converge within the range.
The minister’s definitions emerge from his participation this Wednesday in the 58th Meeting of the Network of Economists, Heads of Central Banks and Ministries of Finance of Latin America and the Caribbean, which takes place from November 7 to 9 in the headquarters of Inter-American Development Bank (IDB) in Washington DC (United States)in hybrid format.
In the morning of today, Labat He participated virtually from Montevideo and detailed how the process of the regime of inflation targets from the beginning of the government in 2020 until now.
Likewise, he valued positively the implementation of regimes of inflation targets in some countries in the region, as a tool that served to confront the international context of high prices since 2020, when the Covid-19 pandemic broke out globally.
Control inflation and strengthen the currency, the objectives of the BCU
Regarding Uruguay, he indicated that the country had a historical average inflation close to 8% during the last 15 years, something that motivated the BCU Board of Directors to build a regime of target inflation robust, with the proposal of moving towards a quality national currency.
For this they were based on four basic pillars: the commitment to a inflation lower as the “sole objective of monetary policy”; a free floating exchange rate regime; take the interest rate as an instrument; and strengthen communication on monetary policy.
Source: Ambito
