- 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 April 23, 2025, saying inflation expectations over the monetary policy horizon remain around the 3.5% target even as economic activity has shown positive momentum and some price pressures have appeared outside volatile consumer basket components. The TPM has been unchanged at 6.00% in each decision since January 2025. March consumer price inflation was 1.2% month on month and 4.4% year on year, driven mainly by volatile items, while inflation excluding food and energy was 0.2% on the month and 4.2% on the year; the CPM said a reversal in the volatile-price increases is expected in coming months, although it also identified pressures in some food and other goods components, and it slightly raised its 2025 inflation forecast to 3.8%. The committee also revised its 2025 GDP growth projection up to 4.0%, citing positive activity data including 4.9% year-on-year growth in the Monthly Indicator of Economic Activity in February and consumer confidence remaining in the optimism zone in March. Externally, the CPM pointed to significantly higher global market volatility from escalating trade tensions, alongside a weaker USD and higher long-term U.S. Treasury yields since the previous meeting, while crude oil prices declined and agricultural commodity prices remained volatile. The committee reaffirmed its commitment to price stability and said it will keep closely monitoring domestic and international developments to take timely measures consistent with the 3.5% 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.