FX.co ★ Uruguay Cuts Key Rate by 50bps to 7.5%

In December 2025, the Central Bank of Uruguay lowered its policy interest rate by 50 basis points, bringing it to 7.50%. This move signifies a shift from a contractionary bias to a more neutral monetary policy stance. As of November, the inflation rate was recorded at 4.1%, staying below the bank's target of 4.5%, while core inflation decreased to 4.3%. According to the BCU's latest forecasts, short-term inflation projections have been adjusted downward from previous assessments, indicating a trend towards further decreases in the coming months. This decline is expected to fall below the 4.5% target over the policy horizon, aided by reduced domestic import prices and a modest downward revision in economic activity due to regional factors. The Board highlighted the stability of inflation around the target, with market and analyst expectations having decreased to approximately 4.6%, and business forecasts averaging at 4.9%. They indicated that they would continue to lower rates toward a neutral level if domestic economic conditions, along with inflation trends and expectations, remain on the anticipated trajectory.