Uruguay CBU holds at 5.75% as forward guidance turns more cautious

Research evidence excerpt

J P M O R G A N

Latin America Economic Research

18 August 2026

Uruguay

CBU holds at 5.75% as forward guidance turns more

cautious

CBU kept the policy rate unchanged at 5.75%, in line with expectations

Economic and Policy Research

Forward guidance shifted from a “balanced risks” assessment toward an

emphasis on heightened global uncertainty and climate-related risks

Lucila Barbeito

We maintain our call for a partial unwind of the accommodative stance in

Q4

The Central Bank of Uruguay (CBU) kept its monetary policy rate (TPM)

unchanged at 5.75%, in line with our expectations, arguing that both its inflation

forecast and private-sector expectations remain broadly consistent with the 4.5%

target over the monetary policy horizon. The decision underscores a preference for

caution: while the CBU sees the disinflation process on track, it continues to flag

pockets of persistence—especially in services—and a still-unfavorable external

risk backdrop.

On inflation, July headline inflation printed at 4.27% oya, close to the target. The

CBU noted a modest increase in core inflation, but emphasized that recent external

shocks have not generated meaningful second-round effects so far. That said, it

highlighted that more inertial components—particularly certain services—remain

relatively elevated, warranting close monitoring in coming months.

Inflation expectations remain largely anchored. Two-year expectations are at 4.5%

for analysts and financial markets, in line with the target, while businesses continue

to report expectations around 5%, albeit with a broad consensus that inflation

should stay within the tolerance range. Taken together, the CBU’s message is that

the credibility gains of recent years are being preserved, but not yet uniformly

across all cohorts—an important nuance for assessing how far policy can lean

dovish without risking re-acceleration.

The global context remains the main source of uncertainty. The COPOM pointed

to geopolitical tensions centered on the Middle East and their potential effects on

commodity prices, keeping the balance of risks tilted toward higher inflation and

weaker global growth. In this setting, major central banks are portrayed as

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