The yields of bills in pesos seem to anticipate the decision that the Central Bank of Uruguay will make this Thursday.
He Monetary Policy Committee (Copom) of Central Bank of Uruguay (BCU) will meet next Thursday to define the behavior of the interest rates and, in the previous one, the market does not anticipate that a modification will occur.
The Monetary Policy Rate It is today at 9.50%, after a reduction of 50 basis points in October, a level at which it would remain in November, something that had even been anticipated by the BCU.
The current scenario was described by Exante, from where they indicated that “the returns of the letters in pesos they do not seem to arbitrate with new casualties of the TPM in no time horizon.”
Specifically, the interest rates in nominal pesos for 30 days are at 9.71%, while those for 90 days are at 9.80%, those for 180 days are in the order of 9.64%, the rates for 360 days reach at 9.62% and the 720-day bills are at 9.87%.
The BCU sets its sights on inflation expectations
When evaluating the behavior of rates, the economist Jose Licandro considered that “the market view is consistent with the warning of the last Copom” and stated that “while the inflation expectations do not enter the target range, the monetary instance will remain slightly contractionary.”
It is that in the minutes of the last Monetary Policy Committee, he BCU considered that the MPR was “at a level close to” ending the downward cycle “that began in 2023.
In the document, they considered that an eventual decline will have to do with “expectations finishing aligning and credibility continuing to be strengthened by remaining within the target range of the inflation”.
It is worth remembering that rates began the year at 11.50% and then in the next five reviews there were four reductions and one occasion in which the MPR was maintained, thus configuring a cut of 200 basis points so far this year.
Source: Ambito
