The Central Bank of Uruguay left its policy rate unchanged at 5.75% at its July 2026 meeting, emphasizing that both its inflation forecasts and market expectations remain aligned with the 4.5% target over the monetary policy horizon. The bank reported that headline inflation stood at 4.27%, while core inflation recorded a moderate increase, with no signs of second-round effects from recent external shocks. At the same time, two-year inflation expectations also remained consistent with the target.
The international backdrop continues to be marked by elevated uncertainty, largely due to geopolitical tensions related to the conflict in the Middle East and their effects on commodity prices. Domestically, Uruguay’s economic activity is expanding below its potential growth rate, although the labor market has stayed relatively stable. The Monetary Policy Committee concluded that the current policy stance remains appropriate to safeguard price stability and keep inflation expectations firmly anchored to the target over the monetary policy horizon.