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The MEF and the BCU warned of persistent global financial uncertainty

The MEF and the BCU warned of persistent global financial uncertainty

The Financial Stability Committee put a magnifying glass on the economic situation in the United States and geopolitical tensions.

Photo: Reuters

He Financial Stability Committeewhich is made up of the Ministry of Economy and Finance (MEF)he Central Bank of Uruguay (BCU) and the Bank Savings Protection Corporation (Copab), warned of “persistent” macro-financial uncertainty at a global level.

Through a statement published this Monday, the Committee assured that “the uncertainty surrounding the international macro-financial situation persists”, since despite the solid numbers in terms of activity and employment that it shows USAthe lowering of rates is being postponed “more than expected” due to the number of inflation.

Likewise, it is noted that “an increase in the price of various financial assets and a greater correlation between them has been observed” in a context where growth in the world economy is projected. For the Committee, although the bank failure events in the United States in March of last year were contained, “vulnerabilities still exist in some regional and small banks,” and particularly in those “highly exposed to the commercial real estate sector.”

“There remains a risk of a further deterioration in international financial conditions, with greater risk aversion on the part of investors, less favorable conditions of access to financing, greater volatility and a reduction in output worldwide,” the report continues. missive.

Geopolitical tension continues in the Middle East

At the same time, they fear that the war between Hamas and Israel continue climbing Middle East, something that, they understand, would intensify “the trend towards a more fragmented world.” In that sense, they put the magnifying glass on the Russia-Ukraine conflict and also the tensions between China and Taiwan.

“The potential extension of the Israeli conflict to other territories could have significant effects on the price of Petroleum and other basic products from the disruption of supply chains and the increase in transportation costs,” they add.

Financial outlook for Uruguay

At the local level, they warn that the potential approval of the plebiscite of the PIT-CNT against the social security reform would directly impact the domestic financial system, both in its development and structure, as well as indirect effects in fiscal matters and other macroeconomic variables.

Finally, the Committee noted that the Uruguayan financial system is “stable”, since there are levels of solvency and liquidity in the banking sector.

BCU.jpg

Meeting of the Financial Stability Committee.

Meeting of the Financial Stability Committee.

Photo: @BancoCentral_Uy

Source: Ambito

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