The Monetary Policy Committee left the TPM at 8.5%, in line with financial market forecasts.
He Central Bank of Uruguay (BCU) avoided surprises and maintained the interest rates for the third consecutive time, following the meeting of the Monetary Policy Committee (Copom) made this Friday.
In this way, the rates will continue at 8.5%, in line with the forecasts of the financial market, While the BCU authorities continue to pursue the objective of consolidating the inflation and their expectations in the middle of the target range.
Communicating the decision of the first meeting of the Copom headed by the new president of the BCU, Washington Ribeiro, The authorities assessed that the inflation The year-on-year growth rate stood at 5.45% in July, completing 14 consecutive months within the target range, stretching the longest period since the implementation of this regime.
In turn, they indicated that the underlying inflation showed an increase of 4.6% due to the rise in the price of some manufactured goods and tradable services.
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Short-term expectations and projections
The BCU highlighted that the average expectations regarding the CPI for the Monetary Policy Horizon (HPM) fell again to 5.94%, remaining within the target for the first time.
In the short term, estimates suggest that inflation will rise again this month, then begin to decline, remaining within the target range and converging towards the center in the HPM.
The international and local scene
At a global level, Copom echoed that the level of activity in the second quarter showed signs of deceleration in a context of greater volatility financial.
Added to this was the increase in international uncertainty, both from geopolitical conflicts, particularly in Middle East, as due to the increase in the rate of Bank of Japan.
The BCU also highlighted that in USA There was a greater than expected reduction in inflation and some weakness in the latest labor market data, while in Uruguay He stressed that activity continues to show signs of growth, driven by private consumption and the recovery of external demand.
Source: Ambito
