Uruguay Keeps Key Rate at 5.75%

The Central Bank of Uruguay keeps its policy rate at 5.75% in April 2026, aiming to drive inflation toward the 4.5% annual target amid high global uncertainty. Inflation stood at 2.94% in March, hitting the floor of the tolerance range due to falling food prices, while core inflation accelerated to 3.5%. Economic activity shows signs of improvement in the first quarter, driven by private consumption. BCU projections suggest inflation will face upward pressure next year due to volatile oil prices and logistics costs stemming from the Middle East conflict. However, with analyst expectations anchored at 4.5% and firms at 5%. The Board emphasized that monetary policy is in a solid position to monitor international risks and ensure inflation converges to the target as projected.

The Central Bank of Uruguay reduced its policy rate by 50 bps to 7.50% in December 2025, moderating its contractionary bias and moving gradually toward a neutral policy stance. Inflation stood at 4.1% in November, remaining below the 4.5% objective, while core inflation eased to 4.3%. The BCU’s projections show short-term inflation forecasts revised down versus the previous Copom and declining in the coming months, converging below the 4.5% target over the policy horizon amid weaker domestic import prices and a modest downward revision to activity due to regional conditions. The Board emphasized the consolidation of inflation around the target, with market and analyst expectations declining to about 4.6% and the average of expectations including firms falling to 4.9%, and said it would continue its cycle of rate cuts toward neutrality if domestic conditions, inflation developments and expectations continue to evolve as projected.

The Central Bank of Uruguay reduced its policy rate by 25 bps to 8.00% in November 2025, moderating its contractionary bias and moving gradually toward a neutral policy stance. Inflation stood at 4.32% in October, remaining around the 4.5% objective for the fifth consecutive month, while core inflation eased to 4.7% as most components decelerated over the quarter. The BCU’s projections show short-term inflation forecasts broadly stable versus the previous Copom and converging below the 4.5% target over the policy horizon, even after a modest downward revision to activity due to regional conditions. The Board emphasized the consolidation of inflation around the target and the two-year average stood at 4.98%, with market and analyst projections near 4.75% and 4.7%, and said it would continue its cycle of rate cuts toward neutrality if domestic conditions, inflation developments and expectations continue to evolve as projected.