MercoPress. South Atlantic News Agency

BCU's new VP insists the peso/dollar exchange rate is ruled by supply and demand

“The Central Bank's goal is to control inflation,” Inthamoussu said

Uruguay's Central Bank Vice President Martín Inthamoussu said Tuesday that the exchange rate between the local peso and the US dollar was “set by supply and demand.” He made those remarks minutes after taking up his new position and pledged to work to keep inflation low amid financial stability.

“The two main tasks of the bank are being achieved simultaneously: price stability, based on a low inflation in the country, and financial stability,” insisted Inthamoussu before an audience that included Economy Minister Azucena Arbeleche, former BCU President Diego Labat, and other high-ranking officials.

Regarding the BCU's role, Inthamoussu explained that “the main objective of the Central Bank is price stability, so the central goal is to control inflation.”

He added that the BCU “does not have an exchange rate objective” because “the price of the dollar is set by the market, by supply and demand; that is to say, the Central Bank does not have an objective in that sense so it will depend on the market behavior.”

The BCU's strategy in recent years focused on monetary policy while developing a financial and payment system together with updating the entity's management policies, he also pointed out. “This has been and will continue to be an open-door board,” he underlined.

“We have developed an innovation strategy both internally and externally, which is leveraged with the superintendency's plans, with the payment system's roadmap, and with other initiatives of the bank's other services,” Inthamoussu also pointed out.

On Aug. 16, Inthamoussu got the Senate's nod after which President Luis Lacalle Pou signed his appointment in a Council of Ministers gathering. Between 2020 and 2024, Inthamoussu served as an advisor to the BCU Presidency. Before that, he was an aide of Labat's at the oil company Ancap.

Uruguay's inflation has remained within target (3 to 6%) since June 2023. Last month, it stood at 5.45% yoy.