18.11.202520:16:50UTC+00Uruguay Cuts Key Rate by 25bps to 8%

In November 2025, the Central Bank of Uruguay made a modest adjustment to its monetary policy by reducing the policy rate by 25 basis points, bringing it to 8.00%. This move signifies a slight relaxation of its previously contractionary stance, with an eye toward achieving a neutral policy position. In October, inflation was recorded at 4.32%, maintaining its alignment with the 4.5% target for the fifth month in a row. Meanwhile, core inflation decreased to 4.7% as most components showed a slowdown over the past quarter. According to the Central Bank of Uruguay (BCU), short-term inflation forecasts remain relatively unchanged compared to previous estimations by the Copom and are expected to align below the 4.5% target within the projected policy timeframe. This outlook holds despite a slight downward adjustment of economic activity projections due to regional factors. The Board stressed the importance of keeping inflation anchored around the target, with a two-year average at 4.98%. Market and analyst expectations are close to 4.75% and 4.7%, respectively. The Board also indicated that it would continue its path of rate reductions towards a neutral stance, provided that domestic conditions, inflation trends, and expectations follow the anticipated trajectory.