LatinNews Daily - 23 February 2024

*Uruguay’s central bank (BCU) has announced that it is holding its benchmark interest rate at 9%, “with the objective of consolidating inflation within the target range and continuing the convergence of its 24-month expectations to the centre of the range”, according to a BCU statement. This follows the first meeting of the monetary policy committee (Copom) this year, which sets an initial strategy for 2024 based on inflation and its expectations. The BCU notes that in January, annual inflation stood at 5.09%, nearly three percentage points below the January 2023 rate. Core inflation decreased from 4.31% to 4.28% in that time, according to the BCU. The BCU also notes that January was the eighth consecutive month in which inflation was within the target range (3%-6%). According to the BCU, inflation forecasts continue to point to a downwards trend. Due to a “rebound in agriculture” from the prolonged drought that afflicted the country last year, these projections also suggest economic growth in the next two quarters – following an increase last quarter, according to the BCU. Citing these projections, Copom made a “positive assessment” about inflation remaining within the target range, the gradual convergence of expectations towards the centre of the target range, and the functioning of monetary policy. The BCU board “will continue to monitor the local and international situation and the convergence of expectations to the centre of the target range”.