The analysts consulted by the Central Bank of Uruguay projected a possible scenario in advance of the Copom meeting, which will be this Friday.
He Central Bank of Uruguay (BCU) anticipated what the behavior of the interest rates, according to the projections of the analysts consulted in the last Economic Expectations Survey (EEA), in the run-up to the meeting of the Monetary Policy Committee (Copom), which will take place this Friday.
After the last and unexpected reduction in November, the market expects the Monetary Policy Rate (TPM) remains at the same level and closes the year at 9.25%, according to the median response of the analysts consulted by the BCU.
Looking ahead to the next six months, the expectation is that the TPM be reduced by 25 basis points between next month and May 2024, while it foresees an additional cut of another 25 basis points for November 2024, placing it at 8.75%.
Finally, the market anticipates a similar reduction throughout 2025, leaving the interest rates at 8.50% and only converging within 5 years at 8%.
Copom anticipated that “the end of the cycle of casualties” is near
Both in the last minute of the Copom As in the previous one, the BCU warned that the TPM is “at a level close to the end of the downturn cycle,” at least until the inflation expectations and approach the target range of between 3% and 6% of inflation.
At the same time, he anticipated that another variable to follow will be the international context, among them “the evolution of the macroeconomic situation” of Argentina, “slowdown in the level of global activity that has been expected for months”, the situation in China and the behavior of the United States Federal Reserve (Fed) about rates.
At the time, the decision to lower rates was divided between a cut and a pause, although the latter measure predominated. Currently, facing Friday’s meeting, the market’s majority expectation is that they will remain at the same level and remain at 9.25%.
Source: Ambito
