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Uruguay central bank hikes key interest rate to 8.75%

BY Reuters | ECONOMIC | 03:19 PM EST

Dec 23 (Reuters) - Uruguay's central bank raised its benchmark interest rate 25 basis points to 8.75%, the monetary authority published on Monday, saying the hike aims to push inflation towards the bank's target.

The central bank expects the increase will help the country's annual inflation converge to 4.50% in the 24-month horizon, from the 5.03% it registered in the year through November, according to official data. (Reporting by Aida Pelaez-Fernandez; Editing by Brendan O'Boyle)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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