- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 6%
The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously held the monetary policy rate at 6.00% on February 21, 2025, citing continued positive economic activity, January inflation driven mainly by volatile basket items that it said could correct in coming months, and the rapid convergence of inflation expectations to the new 3.5% target over the monetary policy horizon; the TPM was also left at 6.00% in January 2025. Annual inflation stood at 3.8% in January, while core inflation excluding food and energy commodities was 3.9%; monthly inflation was 1.0%, and 12-month inflation expectations were 3.7%, with expectations at the policy horizon at 3.5%. On activity, the Monthly Indicator of Economic Activity grew 0.2% year on year in December, with services, livestock production and construction supporting growth, and the Consumer Confidence Index rose to 56.94 in January 2025. Externally, the CPM said the Federal Reserve held its target range at 4.25%-4.50%, expects greater caution in the pace of U.S. rate adjustments in 2025, and noted that oil and soybean prices have fallen in recent weeks while the U.S. dollar and long-term Treasury yields were lower than at the previous meeting. The committee reiterated that it will closely monitor domestic and international developments and implement timely measures to ensure compliance with the 3.5% inflation target.
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.