BCU cuts rates by 50bps on a sharp decline in CPI inflation

URUGUAY - Report 07 Jul 2023 by Esteban Fernández Medrano

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 significant, 50bp drop.

In line with the statement of the economic policy committee, that “future interest rate movements will depend on inflation perspectives”, we expect to see further interest rate cuts in the upcoming COPOM meetings.

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