- 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 May 23, 2025, citing positive economic momentum alongside inflation that remained above target but with expectations for the monetary policy horizon still aligned with the 3.5% objective; the TPM has remained at 6.00% at each meeting from January through April 2025. The CPM said economic activity stayed firm, with the Monthly Indicator of Economic Activity (IMAEP) rising 4.4% year on year in March and the GDP growth projection standing at 4.0%, while the Large Companies Sales Indicator increased 9.9% in March. Monthly Consumer Price Index (IPC) inflation was 0.4% in April and annual inflation was 4.0%, with food, especially meat and dairy products, as the main driver, while inflation expectations for 2025 were unchanged at 4.0% and those for the next 12 months edged up to 3.8%. In the external backdrop, the CPM noted that easing trade tensions reduced international market volatility, the U.S. dollar as measured by the DXY index was at levels similar to a month earlier, and oil prices declined to around USD 62 per barrel on average for WTI-Brent. The committee reiterated that it will closely monitor domestic and international developments and take timely measures to ensure compliance 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.