- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 6%
The Central Bank of Paraguay’s Monetary Policy Committee unanimously held the monetary policy rate at 6.00% on July 22, 2025, citing strong domestic activity, an upwardly revised 2025 inflation forecast and medium-term inflation expectations that remain aligned with the 3.5% target; the TPM has been unchanged at 6.00% in every meeting from January through July 2025. June consumer price inflation was 0.0% month on month, with annual CPI inflation at 4.0% and CPI excluding food and energy at 4.1%, while inflation expectations stood at 3.7% for the next 12 months and 3.5% over the monetary policy horizon. The Committee said economic activity remained dynamic, with the Monthly Indicator of Economic Activity rising 6.2% year on year in May, and revised its 2025 GDP growth projection up to 4.4% from 4.0%, while lifting its 2025 inflation forecast to 4.0% from 3.8%, reflecting higher prices in other food items, especially meat, despite a second-quarter reversal in volatile CPI components. Externally, it pointed to renewed uncertainty around United States economic policy, rising oil prices, and higher U.S. dollar and long-term U.S. Treasury yields since the previous meeting, while markets continue to anticipate that Federal Reserve rate cuts will resume in the second half of the year. The Committee said it will keep closely monitoring 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.