The Central Bank of Uruguay left its benchmark interest rate unchanged at 5.75% at its May 2026 meeting, with the goal of ensuring that inflation continues to converge toward the 4.5% target and that inflation expectations remain well anchored. In April, annual inflation stood at 3.16%, while core inflation was 3.45%, both consistent with an ongoing convergence toward the target.
Two-year inflation expectations from analysts and financial markets remained firmly at 4.5%. In contrast, firms projected inflation at 5%, bringing the overall average of expectations to 4.67%.
On the external front, the Central Bank noted that the ongoing conflict in the Middle East continues to keep energy prices elevated and volatile, while higher long-term interest rates abroad have created a less favorable environment for emerging markets.
Domestically, available indicators suggest that economic activity and employment recovered in the first quarter, with moderate growth anticipated for the remainder of the year. However, the Bank highlighted that inflation risks have tilted slightly to the upside, mainly due to persistently high oil prices.