FX.co ★ Uruguay Cuts Key Rate by 25bps to 9%

The Central Bank of Uruguay, in July 2025, lowered its policy rate by 25 basis points to 9.00%, continuing a contractionary approach to aid the sustained alignment of inflation with the 4.5% target. As of June, inflation was recorded at 4.59%, aligning with the target range, while core inflation also showed a decrease, although it remains influenced by price rigidities in non-tradable goods and services. The Central Bank of Uruguay (BCU) revised its projections downwards, indicating that inflation is expected to remain around 4.5% over the forthcoming two years. A weaker global dollar and decreased commercial and geopolitical uncertainties have lessened volatility in international prices. The Board highlighted the necessity of solidifying inflation at the target level and reinforcing the downward expectations trend, suggesting that further rate reductions might be justifiable if both inflation and expectations progress as anticipated.