The Central Bank of Uruguay extended its flexibility cycle by reducing the key interest rate in a point of point after two months of inflation near its goal.
Tuesday’s decision left loans at 8.75% after a cut of 25 basic points in July. This measure was widely expected in the survey conducted by the Central Bank this month to 11 financial institutions, which also predicted another cut of a quarter point this year.
The authorities will continue to cut the rates if inflation behaves as expected and inflation expectations, especially those of the companies, approach the objective, the Central Bank said in a statement.
Uruguay, who for a long time was an atypical case of high inflation in Latin America, is finally controlling consumer prices thanks to a contractive monetary policy and a strong currency. After reaching a maximum of almost 5.7 % in March, inflation approached the goal of 4.5 % in June and July.
The monthly survey to analysts of the Central Bank forecast for the first time that inflation would close the year as planned. The two -year inflation perspective was 5% in the August surveybut within the tolerance range of the monetary authority of more or less 1.5 percentage points.
The Central Bank said that inflation will be maintained around 4.5% during its 24 -month policy horizon.
