Uruguay Hikes Key Rate to 8.75%, Flags Risk to Inflation Outlook
- Central bank tightens 25 bps in its first hike in two years
- Policymakers flagged underlying inflation, expectations
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Uruguay’s central bank surprised markets with a quarter-point interest rate hike Monday, citing an uptick in underlying inflation and long-term inflation expectations.
Uruguay’s first interest rate increase in two years lifted the benchmark rate to 8.75%, surprising all five analysts surveyed by Bloomberg who expected the bank to remain on hold for an eighth straight month at 8.5%.