Uruguay’s central bank lifts key rate to 11.25%

Bloomberg

Uruguay’s central bank increased its benchmark interest rate to 11.25% and signalled it will tighten again by another half point next month.
Policymakers raised borrowing costs by 50 basis points for a fourth consecutive policy meeting. Consumer prices slowed by the most in a year-and-a-half to 9.05% in October, but remain well above the 3%-6% target.
With another hike in December, “rates would be reaching sufficient levels so that inflation and expectations converge with the target range within the horizon of monetary policy,” the central bank said in a statement.
Latin American central banks including Uruguay, Chile and Brazil have maintained a hawkish stance even as inflation slows from multi-year highs in recent months. Uruguay’s central bank has struggled to lower inflation expectations with its latest survey of economists putting consumer prices at 7% in September 2024.
The central bank said that some leading indicators suggest the economy will grow at a slower pace during the second half of the year.