Tuesday, September 1st 2026 - 09:49 UTC
Against that backdrop, banks will have to warn clients of the exchange rate risk attached to dollar accounts
The Central Bank of Uruguay completed five years on Monday without intervening in the foreign exchange market. Its last operation was a purchase of 31.2 million dollars in 2021. Its president, Guillermo Tolosa, described the milestone as of “enormous” importance and said the country is going through a period of “absolutely free floating of the currency”.
“The exchange rate has behaved in a very harmonious way, at almost the same level we had back then,” he said in an interview with radio Universal. He attributed that stability to three factors: an economy exporting some 20 billion dollars a year, the legal prohibition on the central bank financing the government, and an inflation-targeting regime.
Tolosa linked the absence of intervention to price developments. “The fall in inflation today is sustainable. We have inflation close to our target and we did not depend on using our reserves to achieve it,” he said. Inflation stands at 4.3%, against a target of 4.5%. He recalled that for eighty years Uruguay assumed reducing inflation required intervening in the currency market using reserves, and said the tool would only be used in specific episodes of disruption or when the target is seriously at risk, with interest rate moves preferred first.
