The new president of the Central Bank of Uruguay (BCU), Washington Ribeiro, He anticipated what the keys to his management will be at the head of the monetary authority, replacing Diego Labat, who in his farewell sent a wink to the candidate of National Party, Alvaro Delgado, who convinced him to “take the leap into public activity.”
Among the future axes, Ribeiro stated that his arrival implies “a change of people”, but made it clear that “what will not change are the policies”, anticipating that he is betting on a continuity of the monetary politics driven by Labat.
Inflation target range maintained
During his speech in the hall Enrique V. Iglesias of the BCU, Ribeiro highlighted the role of his predecessor and clarified that “he will maintain the regime of inflation with a target of 4.5%”, using the Monetary Policy Rate (TPM) to keep it between 3 and 6%.
“We are where we wanted to be, but we are not where we wanted to be. There is still a long way to go and we have to keep working,” said the leader, noting that “the seven months left are part of a five-year cycle that is working.”
Looking back, he stressed that so far “the greatest challenge has been achieved” and aimed to “strengthen the process of deindexing, that will allow the Uruguay that future efforts in anti-inflationary control will be much simpler.”
Guaranteed the free floating of the dollar
On the other hand, Ribeiro echoed the frequent criticisms of the exchange rate lag of some sectors, mainly linked to the agriculture already them exporters. “We have not intervened in the foreign exchange market for almost three years and we will continue to do so,” he said.
The new head of the BCU insisted that “it is not sustainable to maintain a fixed exchange rate nor is it conceivable to manipulate the “real exchange rate”. “The BCU did everything possible to ensure that this market moves smoothly and the value of the exchange rate represents the strength of the market,” he continued on the value of the dollar.
“Is the exchange rate the one that closes the equation for all companies? cost effectiveness? “Of course not,” he admitted, adding: “Either we fight to control something we cannot control or we take care of changing what is within our power.”
Modernization of the payment system
At the same time, he stressed that the monetary authority made progress in modernizing the payment system. “We have followed the recommendations of Basel and developed a roadmap based on the guidelines of the IMF”, Ribeiro said of a process that will continue.
Along these lines, he highlighted the signing of an agreement to train teachers and that the financial education be part of the formal system. “At a time when we are accompanying a process of debt restructuring, Hopefully this education will make this not necessary in 10 or 15 years,” he said about the program recently launched by banks and credit administrators.
Finally, Ribeiro considered it important that the BCU “shorten the time between the quarter in question and the date of publication of the statistics, because it will greatly improve decision-making.”
Source: Ambito
