- 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 June 24, 2025, citing positive economic momentum, inflation expectations that remain aligned with the 3.5% target over the monetary policy horizon, and heightened external uncertainty from Middle East tensions and oil price volatility; the TPM has been unchanged at 6.00% since January 2025. The CPM said economic activity remained dynamic, with the Monthly Indicator of Economic Activity (IMAEP) rising 3.3% year on year in April, in line with its 4.0% GDP growth projection, while the Large Companies Sales Indicator increased 3.7% and the Consumer Confidence Index stayed in the optimism zone at 53.5 in May. May consumer price inflation was 0.0% month on month, with annual inflation at 3.6% and the IPCSAE measure at 4.3%, while 12-month inflation expectations eased to 3.7% and expectations over the policy horizon remained aligned with the 3.5% target. Externally, the CPM noted that in the United States job creation in May exceeded expectations, inflation rose to 2.4% and the Federal Reserve kept the federal funds target range at 4.25%-4.50% while projecting 50 basis points of cuts in the second half of the year; it also highlighted that geopolitical tensions in the Middle East have increased uncertainty around crude oil and derivative prices, while wheat prices rose and soybean and corn prices fell. The Committee reiterated that it will continue to 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.