The Uruguayan central bank is waiting for stronger signals of economic recovery before altering the current monetary policy, according to a release from the Monetary Policy Committee, Copom. In its third 2021 meeting, at the end of June, it ratified the current reference interest rate of 4,5% and anticipated it will wait for improved indicators from the pandemic battered economy.
Uruguay's Gross Domestic Product (GDP) fell 2.8% in the first quarter of 2021 compared to the same period of 2020, according to a Central Bank (BCU) report released Wednesday.
Uruguay has managed to keep inflation at 6.8%, which is within the government's target range for the first time in 36 months, it was announced Wednesday.
Uruguay's Central Bank Friday released its report for the first quarter of 2021 which highlighted the entity's concern regarding “three relevant risks” in a growth scenario of just 3.5% this year.
Uruguay raised US$ 2 billion from a dual-currency debt deal on Wednesday, issuing UYU47.1 billion (US$ 1.12 billion) in new inflation-linked, 20-year notes and adding US$ 400 million to its 4.375% 2031 bonds, plus a rescheduling of US$ 500 million in 2027, 2028 and 2030 Indexed Units.
The Central Bank of Uruguay (BCU) released the report of the country's quarterly economic situation, which reports that the Uruguayan economy grew by only 0.1% year-on-year and 0.3% in the second quarter of the year, compared to the first three months of the year, when it registered a 0.1% drop.
Moody's has lowered its outlook on Uruguay's (Baa2 negative) banking system to negative from stable on the expectation that asset risks will rise moderately as challenging economic conditions weigh on consumers and businesses alike, and profitability will decline.
Uruguay's central bank was forced to sell almost 65 million dollars on Tuesday, the highest volume so far this year, to keep the US dollar from ballooning as fears of the collapse of the Brazilian economy are felt through the region. The dollar finally ended trading with a slight 0.12% increase at 28,826 Pesos to the greenback.
Uruguay's economy is strong enough to navigate in a challenging global and regional environment in which the U.S. dollar is strong and inflation is starting to rise, Uruguayan Central Bank, (BCU), chairman Mario Bergara said during a conference in Montevideo where he discussed the central bank's mission in the current world environment.
Uruguay's fiscal deficit in the twelve months to August was equivalent to 3.3% of GDP, or 1.725bn dollars according to the latest release from the Economy and Finance ministry. However the primary deficit (before debt payments) was 202 million dollars or 0.39% of GDP.