- 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 (TPM) at 6.00% on March 21, 2025, citing continued positive momentum in economic activity, February inflation driven mainly by specific price increases such as fuels, and inflation expectations that remain around the 3.5% target over the monetary policy horizon; the TPM was also held at 6.00% in January and February 2025. Domestically, the Monthly Indicator of Economic Activity (IMAEP) rose 6.7% year on year in January, or 8.7% excluding agriculture and electricity generation, supported by manufacturing, construction, services and livestock, while the Large Companies Sales Indicator increased 6.5% and the Consumer Confidence Index stayed in optimism territory at 50.5 in February. Consumer price inflation was 0.4% month on month in February, with annual inflation at 4.3%, while core inflation was 3.6% and inflation excluding food and energy was 4.1%; 12-month inflation expectations stood at 3.7% and expectations over the monetary policy horizon at 3.5%. Externally, the Federal Reserve kept rates at 4.25%-4.50%, while the USD and long-term U.S. Treasury yields declined amid uncertainty over the impact of U.S. trade policies on global growth. The CPM also noted that crude oil and agricultural commodity prices fell on better supply prospects and expectations of weaker world demand linked to greater trade restrictions, and it reiterated that it will keep closely monitoring domestic and international developments and take timely measures to ensure compliance with the 3.5% 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.