LatinNews Daily - 20 April 2023

In brief: Uruguay leads the way with interest rate reduction

* Uruguay’s central bank (BCU) has reduced its benchmark interest rate by 25 basis points to 11.25%, becoming the first inflation-targeting country in Latin America to begin lowering borrowing costs. Inflation in Uruguay has been on a downward trend for the past six months, and in March was running at an annual rate of 7.33%, according to the BCU. While this remains above the BCU’s target range of 3-6%, the decision to cut interest rates came after Uruguay’s economy entered a technical recession in the second half of 2022; the economy shrank by 0.75% in Q3 2022 in seasonally adjusted quarterly terms, followed by a second contraction of 1.3% in Q4 2022.

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