MONTEVIDEO – Uruguay’s economy is “strong enough to navigate in a challenging global and regional environment” in which the U.S. dollar is strong and inflation is starting to rise, Uruguayan Central Bank, or BCU, chairman Mario Bergara said.
The BCU’s current reserves “provide many guarantees and reassurance in a context in which Uruguay’s country risk remains at very healthy levels,” the central bank chief said.
“The external landscape keeps changing and requires attention, but we think we have a strong platform to navigate the volatility and changing international environment reasonably well,” the BCU chairman said.
Bergara spoke during an appearance Tuesday at the Sheraton Hotel Montevideo at which he discussed the central bank’s mission in the current global economic environment.
The “challenging” global and regional context includes a recovering U.S. economy with a stronger dollar, and a “lethargic” European Union “rife with financial and political strains,” the monetary official said.
There is also a “slowdown” in China, while Uruguay’s neighbors – Argentina and Brazil – are experiencing an “economic cooling,” Bergara said.
“In this context, the Uruguayan economy has continued growing at lower but still good rates,” the central bank chief said. “At the end of 2014, growth was at 3.5 percent and for this year we have a reasonable expectation of more growth.”
Some 90 percent of opinion leaders view the BCU “not just as a good regulator and supervisor,” but also as an essential participant “in the construction of a stable and solvent financial system,” Bergara said.
A central bank’s reputation and credibility are essential because its actions are perceived in a different way if the institution is credible, transparent and sound, the BCU chief said.
“The BCU’s credibility today reassures us when we set monetary policy and the time comes to take financial regulatory measures,” Bergara said.