Uruguay holds rate for fourth consecutive time

The Central Bank of Uruguay on August 16 held its policy rate at 8.5% following a slight rise in inflation last month.

Year-on-year inflation stood at 5.45% in July compared with 4.96% in June. However, the bank’s monetary policy committee (MPC) noted in a statement that the July figure remained within its target range of 3–6%.

The MPC added that the average inflation expectations over the coming two years had also fallen to 5.94%. July’s inflation figures, it said, were lower than expected.

It forecast that inflation would rise again this month but would gradually decline afterwards and move towards the centre of the target range.

The committee said the domestic economy continued to show signs of growth driven by private consumption and external demand.

However, it noted that volatility in the international financial markets over recent weeks pointed to a slowdown in global economic activity. It added that conflict in the Middle East and the rate hike in Japan contributed to an increase in uncertainty.

This was the first rate decision since Washington Ribeiro replaced Diego Labat as the central bank’s president last month. Martín Inthamoussu, who had been an adviser to the bank’s board since 2020, took over as vice-president from Ribeiro.

Regional forum on payments

Representing the bank at a conference hosted by the Latin American Reserve Fund (Flar) on August 14, Ribeiro confirmed that Uruguay would host the Third Regional Forum on Instant Payments in 2025.

The forum, also hosted by Flar, will bring together central bankers in Latin America and the Caribbean to exchange knowledge and discuss best practice in instant payment systems.

Ribeiro said that launching an instant payment system in Uruguay had been among the central bank’s “main priorities” since 2020. He added that such a system would make life easier for citizens and aid the authorities’ economic development agenda.