Uruguay | Promising changes in monetary policy will help lower inflation

Summary

The rate of inflation in Uruguay has dropped significantly in recent decades but still remains high. The Monetary Policy Committee announced that it will use the interest rate as an instrument of monetary policy and set it at 4.5% per year. It also ratified the new target range of 3% to 6% from September 2022.

Key points

• Key points:
• Uruguay has historically kept high inflation rates and, although in recent years they have managed to reduce them significantly, they are still high compared to other countries.
• The Central Bank changes the monetary aggregates for the interest rate as an instrument of monetary policy, fixing it at 4.5% and announced that it will maintain the expansive tone until the effects of the pandemic are overcome.
• The Monetary Policy Committee will reduce the inflation target range from 3%-7% to 3%-6% in September 2022.

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