Uruguay central bank ups reserve requirements to combat inflation

MONTEVIDEO, March 6 Wed Mar 6, 2013 3:29pm EST

MONTEVIDEO, March 6 (Reuters) - Uruguay's central bank on Wednesday said it will raise marginal reserve requirements on local and foreign currency deposits from April 1 as part of its effort to bring inflation within the official target range.

Banks in the South American country will have to abide by a marginal reserve requirement of 25 percent for deposits in Uruguayan pesos, up from the current 20 percent. The requirement for foreign currency will rise to 45 percent from 40 percent.

Uruguay's marginal reserve requirements refers to the growth of deposits since April 2011, when the central bank introduced the scheme to expand its monetary policy tools.

Consumer prices in Uruguay rose 0.99 percent in February, bringing 12-month inflation to 8.89 percent, well above the central bank's target range of 4.0 percent to 6.0 percent.

Consumer price inflation was 7.48 percent in 2012 and 8.6 percent the year before.

The central bank's key interest rate is currently set at 9.25 percent.