The BCU anticipated at least two increases of 50 basis points, the next of which will be in August. On Banco República (BROU) boards, the US dollar rose by five-hundredths, closing at 38.85 for purchase and 41.25 for sale.
The Central Bank of Uruguay (BCU) recently raised the monetary policy interest rate by 50 basis points to 9.75%. They stated that this increase ratifies the commitment to continue going through the contractionary phase of monetary policy.
The financial institution noted the assessment of different aspects of the international and domestic situation for the monetary policy decision. That has been the eighth consecutive increase since August 2021, when the reference rate rose from 4.5% to 5%.
Uruguayan inflation dropped slightly to 9.29% over the 12 months ending in June. It went down from 9.37%, registered in the interannual measurement of May, a value similar to that of March and April. The consumer price index (IPC) is still far from the target range, which will be between 3% and 6% from September.
The US Dollar Rises to Its Highest Value in a Month
The war in Ukraine and the sanctions against Russia have further pressured high global inflation. Besides, interest rate hikes by central banks slow down the economy, while many investors fear this strategy will cause a recession. That situation led to global greed for the US dollar, which also occurred in the financial market of Uruguay.
The price of the interbank dollar in the local market increased by 0.57% and traded at around 40.17 Uruguayan pesos (UYU). That value is the maximum in over a month, as it was at UYU 40.20 on May 30th.
The US dollar has risen by 3.75% over the last week but has dropped by 5.31% over the past year. It has accumulated positive figures in two consecutive sessions, compared to previous days.
Over the last week, the volatility was 25.37%, a figure higher than the annual volatility data (11.48%). Therefore, it shows more significant changes than the general price trend.
On average, citizens have exchanged the US dollar at a maximum of UYU 44.73, while its lowest level has been UYU 38.51.
Investors have made 47 transactions through the Electronic Stock Exchange (Bevsa) screens for USD 23.9 million. On the Banco República (BROU) boards, the US dollar rose by five-hundredths, closing at 38.85 for purchase and 41.25 for sale.
Uruguay Has Become a Risk Country
The country risk measured through the UBI Index rose by four basis points and closed at 138 units.
The increase included a mix of the price of Uruguayan bonds and an increase in the value of US treasuries. The country’s risk rises by six basis points monthly and by 33 units yearly.
The call interest rate banks charge for overnight loans operated at 9.33%, practically within the target of the Central Bank for the reference rate (9.25%).
Amid high-interest rates in Uruguay, the crypto market remains bearish with slight recoveries. Bitcoin (BTC) is trading at around USD 20,508 and has accumulated a 2.5% gain over the last 24 hours, according to CoinGecko.
By Alexander Salazar
