The Central Bank of Uruguay reduced its policy rate by 50 bps to 7.50% in December 2025, moderating its contractionary bias and moving gradually toward a neutral policy stance. Inflation stood at 4.1% in November, remaining below the 4.5% objective, while core inflation eased to 4.3%. The BCU’s projections show short-term inflation forecasts revised down versus the previous Copom and declining in the coming months, converging below the 4.5% target over the policy horizon amid weaker domestic import prices and a modest downward revision to activity due to regional conditions. The Board emphasized the consolidation of inflation around the target, with market and analyst expectations declining to about 4.6% and the average of expectations including firms falling to 4.9%, and said it would continue its cycle of rate cuts toward neutrality if domestic conditions, inflation developments and expectations continue to evolve as projected.
