The Central Bank of Uruguay will decide on Tuesday 16 whether to maintain the rate at 8.5% or decide to increase it.
He Central Bank of Uruguay (BCU) will decide in the next few days whether to maintain or modify the interest rates reference, after having decided to maintain the level at 8.5% almost two months ago.
He Monetary Policy Committee (Copom) will meet next Tuesday 16th, with the aim of maintaining the inflation within the target range. At a time when the CPI has risen for two consecutive months and could continue to rise, the BCU must decide whether or not to support this with a change in rates.
Regarding the possible action of the BCU, an important indicator may be the cut rates of the Monetary Regulation Letters (LRM). In this regard, the 90-day cut-off rate closed at 8.66% on Wednesday, a slight increase of 1 basis point compared to the previous auction, similar to the 30-day rate, which is around 8.6%.
In this way, the LRM are just above the current level of rates, which are at 8.5%. In this way, in the next few days it will be known whether Copom decides to maintain the balance or resolve a slight increase in line with the Letters and trying to contribute to the reduction of the inflation.
What have been the decisions made by Copom so far this year?
After a 2023 in which it led the reduction of rates At the regional level, the BCU started this year with a rate of 9%. At the first meeting of the year, in February, the authorities decided to keep it at that level to consolidate the decline. inflation already waiting for the convergence expectations of economic agents.
In April, amid criticism over the exchange rate lag and the president’s promise Luis Lacalle Pou to make a gesture in that sense, the Copom lowered it by 50 basis points and left it at 8.5%.
Finally, at the last meeting, it remained at 8.5%, as expected. market, According to the BCU, the objective is to “consolidate the permanence of inflation around the center of the target range and contribute to the convergence of the different measures of expectations.”
Source: Ambito
