- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 6%
The Central Bank of Paraguay said its Monetary Policy Committee unanimously held the monetary policy rate at 6.00% on January 23, 2025, citing continued positive momentum in domestic activity and demand, favorable behavior in headline and underlying inflation, and lower inflation expectations in line with the reduction of the target to 3.5%, even as the external backdrop points to a more cautious pace of Federal Reserve rate adjustments in 2025 and higher crude oil and agricultural commodity prices. Domestically, the Monthly Indicator of Economic Activity grew 7.5% year on year in November, led by services, manufacturing, construction and agriculture, while December consumer price inflation was 0.7% month on month and 3.8% year on year, with inflation excluding food and energy at 3.7% in annual terms; the Consumer Confidence Index remained in optimistic territory at 53.98 in December. Globally, the committee noted stronger-than-expected U.S. job creation, U.S. inflation at 2.9% in December, broadly unchanged levels for the USD and long-term U.S. Treasury yields versus the previous meeting, and recent increases in oil, soybeans, corn and wheat linked to U.S. sanctions on Russia’s energy sector and less favorable weather in key producing regions. The central bank reiterated its commitment to price stability and said it will continue to closely monitor domestic and international developments and take timely measures to ensure inflation converges to target over the monetary policy horizon.
Rate evolution
On 23 July 2026, the Central Bank of Paraguay’s Monetary Policy Committee unanimously maintained the policy rate at 5.50%, saying the level was consistent with a neutral monetary policy stance. The committee said economic activity had performed better than expected in the first five months of the year and raised its 2026 gross domestic product growth forecast to 4.5% from 4.2%, while lowering its inflation forecast to 3.3% from 3.5% and flagging risks from higher oil prices and expectations of policy rate increases by the United States Federal Reserve.
On 25 August, the committee again unanimously held the policy rate at 5.50%, maintaining a neutral monetary policy stance. It said economic activity remained consistent with the 4.5% growth forecast, while headline inflation declined to 1.6% in July and inflation expectations remained anchored at 3.5%, although uncertainty over international energy prices persisted and markets anticipated a somewhat higher path for Federal Reserve interest rates.
On 21 September, the committee unanimously kept the policy rate at 5.50%, judging it consistent with a neutral monetary policy stance as economic activity maintained a favorable performance in line with the 4.5% growth forecast. Headline inflation eased to 1.5% in August, while inflation expectations remained aligned with the 3.5% target, and the committee continued to project inflation of 3.3% at year-end and convergence to the target over the policy horizon, while flagging risks from petroleum product prices, the conflict in the Middle East and expectations of another federal funds rate increase during the remainder of the year.