Archive

February 13, 2025

Uruguay: 25bp Rate Hike To 9% (Consensus 8.75%) in Feb-25

  • The BCU raised its policy rate by 25bps to 9.00%, defying market expectations for a hold and reinforcing its hawkish stance in response to rising core inflation and deteriorating inflation expectations.
  • Despite headline inflation staying within target, core inflation has breached 6.1%, and two out of three inflation expectation measures exceed the target range, justifying the central bank’s proactive tightening.
  • Global economic headwinds and regional inflationary pressures, especially in Brazil and Argentina, suggest Uruguay will maintain a restrictive monetary stance, making near-term rate cuts unlikely.
February 06, 2025
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Mexico: 50bp Rate Cut To 9.5% (Consensus 9.5%) in Feb-25

  • Banco de México accelerated its rate-cutting cycle by reducing the overnight interbank interest rate by 50 basis points to 9.50%, reflecting greater confidence in disinflation and recognising growing economic weakness.
  • Inflation is expected to reach the 3% target by Q3 2026, but risks remain skewed to the upside, including persistent core inflation and trade policy uncertainty following the US's tariff announcements.
  • The central bank signalled the possibility of further rate cuts of similar magnitude. However, it will maintain a restrictive stance, with decisions guided by inflation trends, economic activity, and external risks.

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