Uruguay Interest Rate

The Central Bank of Uruguay raised its benchmark policy rate by 25 basis points to 9% during its February 2025 meeting, reaffirming its goal of achieving inflation convergence toward the 4.5% target within the 24-month Monetary Policy Horizon. Annual inflation was 5.05% in January, maintaining 20 consecutive months within the target range, the longest streak since the inflation-targeting regime began. However, core inflation rose to 6.1% and exceeded headline inflation, moving outside the target range for the first time since April 2023 due primarily to higher prices of tradable goods. Globally, advanced economies face less favorable growth prospects and persistent upward pressure on core inflation. Uruguay's GDP grew 4.1% year-on-year in Q3, with 2024 growth projected at 3.4%. The Central Bank highlighted positive transmission of monetary policy but noted ongoing global uncertainty, reinforcing the need for tighter policy to anchor inflation expectations.