Uruguay | Monetary policy course

Summary

Six months after the return to the use of the interest rate as a monetary policy instrument of the Central Bank, we report first results.

Key points

• Key points:
• The market has not shown any deviation from the reference rate, making it explicit that agents see the message of the monetary authority (and of economic policy in general) and the commitment assumed with the targets set as consistent.
• Inflation expectations have curved downwards, although they are still above the target range.
• The announcement of the Strategic Plan 2021 - 2025 makes explicit the CB's priority of strengthening monetary policy to keep inflation low and in line with international rates. This is a necessary condition to advance with the objective of de-dollarizing the economy and developing a domestic currency market.

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