Rates On Hold

Uruguay's monetary authorities kept the country's policy rate on hold at 6.25% in June for the sixth straight month. While the central bank was quick to insist that it is monitoring inflationary pressures carefully, we believe that rapidly rebounding economic activity and inflation that has breached the central bank's upper target of 7.0% y-o-y in each of the last four months will likely see the hiking cycle begin soon. We believe that rates will reach 7.50% by year-end, but highlight that risks are increasingly weighted to the upside as still strong domestic demand pushes prices higher.

To read the full article, please choose one of the following options: