The vice president of Central Bank of Uruguay (BCU), Washington Ribeiro, he referred to exchange delay and assured that the problem is partially explained because “Uruguay It is a serious, stable and extremely attractive country for foreign investment, especially direct.”
Ribeiro admitted in dialogue with Radio Carve that the nominal exchange rate “is not desirable, since it is one of the factors that affect the competitiveness, especially in the short term”, while ruling out that the BCU has lost independence.
The graduate in Economics graduated from the Udelar warned that “the exchange rate today is defined by the marketthat is, due to the game of supply and demand” and insisted: “The BCU has not intervened since August 31, 2022.”
“The flip side of low sovereign risk Uruguay, which is within the historical minimum and the minimum within the region, in some way explains the value of the nominal exchange rate that we have today,” explained the vice president of the BCU.
For all this, he defended that the free floating of the dollar. “You cannot swim permanently against the current because in the end you drown, and the same thing happens with the exchange rate,” he noted.
For this reason, Ribeiro called to “work to improve the competitiveness of the Uruguay”, concept on which he elaborated: “There are many more factors that influence: infrastructure, logistics, financial education, low inflation, innovation, commercial openness and productivity.”
Monetary policy and inflation
When asked about the questions from different sectors, Ribeiro admitted that “the criticism from exporters and farmers is understandable,” but clarified that the exchange delay “it’s because monetary politics in a small part.”
“The effect, if it had one, was when it required lowering the inflation. Today monetary policy is at a level of neutrality or slightly contractionary, so the consequences on the exchange rate should be very attenuated,” he said about the current level of monetary policy. Monetary Policy Rate, in 8.5%.
Finally, he appreciated that inflation has been within the target range for 10 months and recalled that the BCU expects it to continue like this “for at least two more years.” In the future, the leader stated that “if there is an adequate level of consistency between other policies and monetary policy, the expectations “They are going to continue falling to satisfactory levels.”
Source: Ambito
