(Bloomberg) -- Uruguay’s central bank increased its benchmark interest rate to 9.25% and signaled borrowing costs will keep rising as monetary policy turns contractive to fight inflation.

Policy makers raised the key rate on Tuesday by three quarters of a percentage point, and forecast at least two more increases of half a percentage point at its next meetings. 

The move came on top of a 1.25 percentage point increase in April. 

Further tightening will “take interest rates to levels consistent with the convergence” of inflation expectations with the central bank’s target, the monetary authority said in a statement.

Central bankers across the Americas are raising borrowing costs as surging global food and energy prices send inflation soaring. However, Uruguay’s central bank led by former Banco Santander executive Diego Labat faces the added challenge of lowering inflation that was chronically high even before the global commodities shock.

Consumer prices rose about 9.4% for a second consecutive month in April, just above the 10-year average of 8.3%. 

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