Uruguay: Central Bank leaves policy rate unchanged in April
Hold follows seven cuts in a row: At its meeting on 21 April, the Central Bank of Uruguay (BCU) decided to maintain its policy rate at 5.75%. This marks the first hold after seven consecutive cuts.
Global uncertainty and heightened price pressures drive the decision: Despite inflation falling to 2.9% in March, heightened international uncertainty has raised price expectations for the coming months. To ensure inflation remains anchored near the 4.5% target, the Central Bank paused the easing cycle it began in July 2025. The Bank also cited signs of recovery in Q1 economic activity indicators, driven mainly by robust private consumption, suggesting further upside risks to the inflationary outlook.
Policy outlook: The BCU did not provide explicit forward guidance on future monetary policy moves, stating that decisions will depend in part on the effects and length of the Iran war. Our panel remains divided: Half of our panelists expect the Bank to remain on hold throughout 2026, one sees a cut, and one anticipates a rate hike. The BCU is scheduled to reconvene on 26 May.