Uruguay’s inflation rises to 4.55% in August

Uruguay’s year-on-year inflation reached 4.55% in August, keeping it inside the government’s tolerance range for the fifth month in a row. The range runs from 3% to 6%, after inflation fell below it in March.

The National Statistics Institute’s Consumer Price Index report put monthly inflation at 0.24%. Inflation accumulated during the year stood at 3.65%.

The main contributions to the monthly index came from several divisions. Clothing and footwear reduced the figure by 0.05 percentage points, while housing, water, electricity, gas and other fuels contributed 0.04 points. Household furnishings and regular household goods added 0.04 points, as did health and restaurants and accommodation services. Transport contributed 0.05 points, education services 0.03 points, and insurance and financial services 0.03 points.

In August, the Central Bank of Uruguay kept its monetary policy rate at 5.75%, where it has remained since March. The bank said its inflation projections and market expectations continued to move toward the official 4.5% target for the monetary policy horizon. After a meeting of its Monetary Policy Committee, the bank noted that year-on-year inflation had reached 4.27% in July and said underlying inflation had shown a moderate increase without evidence of second-round effects from recent external shocks.

During a recent visit to Uruguay, International Monetary Fund Managing Director Kristalina Georgieva congratulated the central bank for reducing inflation and anchoring market expectations. She also advised against rushing to set a lower target than the current one.

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showed a moderate increase without evidence of second-round effects from recent external shocks