URUGUAY
Recent Country Insights
Serene macro indicators face uncertain political events
URUGUAY · Report · 20 Mar 2024
Uruguay's relatively calm macro indicators contrast with an environment of uncertain upcoming political events. Such political intensity is not only magnified by this year’s presidential election but also by the labor unions trying to reach, before the deadline on April 27, the required 280,000 s...
The BCU anticipates being close to the end of its easing cycle
URUGUAY · Report · 12 Oct 2023
The BCU's latest rate cut was no surprise as it was aligned with declining inflation. However, the objective of the monetary authorities to convince local market players to de-dollarize the economy suggests that local authorities might keep interest rates higher for a longer time frame than initi...
Is the economy building momentum for a depreciation of the UYU peso?
URUGUAY · Report · 28 Aug 2023
In this report, we examine the reasons for a possible end to the UYU peso's appreciation path. A growing trade deficit, declining external competitiveness linked to falling local activity, and CPI inflation's fall towards the lower end of the BCU inflation target not only lead us to believe that ...
BCU cuts rates by 50bps on a sharp decline in CPI inflation
URUGUAY · Report · 07 Jul 2023
The BCU announced yesterday that it cut the reference interest rate by 50bps, to 10.75%. While a rate cut had been expected (for more information see our June 12 report, “Declining inflation suggests rate cuts will continue”), the monetary authorities decided this time around to implement a more ...
Declining inflation suggests rate cuts will continue
URUGUAY · Report · 12 Jun 2023
While April's trade data reflected worse-than-expected results due to poor export performance, inflation improved significantly in May, particularly the PPI. As reserves and labor productivity remain stable enough to overcome the agricultural export slowdown we see no significant risk in the asse...
Senate approves in general the Social Security System Reform
URUGUAY · In Brief · 28 Dec 2022
In the early hours of today, the Senate approved in general terms the “common pension system bill”, i.e. the social security reform that rises the minimum retirement age from 60 to 65 and represents one of president Luis Lavalle Pou’s (LLP) politically costly, but strategic reform projects. Even ...
BCU interest rate cuts around the corner?
URUGUAY · Report · 27 Dec 2022
Recent declining inflation and activity indicators suggest that the BCU monetary tightening might be coming to an end. Contrary to the last Monetary Policy Committee on November the 15th, where the monetary authorities announced another 50bps hike of the reference rate to 11.25%, we would not be ...
November Producer Price deflation suggests further CPI deceleration
URUGUAY · Report · 30 Nov 2022
Following softer food and energy prices and a somewhat stronger local FX rate, the recently published November Wholesale Price Index registered deflation of -3.5% m/m, reinforcing the October reading of -5.8% m/m. The resulting -0.9% y/y rate is the lowest annual inflation rate since 2017 and a s...
Uruguay confirmed innovative Green Bond issuance and debt swap
URUGUAY · Report · 21 Oct 2022 · 1 response
On October 20, the government confirmed the issuance of an innovative 12-year global dollar-denominated “green-bond”, i.e., a Sovereign Sustainability-Linked Bond (SSLB), indexed to climate change indicators, whose final cash flow depends on whether Uruguay meets certain environmental objectives ...