- 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 August 22, 2025, saying the favorable evolution of activity and demand in the first half of 2025, together with softer recent monthly inflation and trend indicators than earlier in the year, supports a view that inflation will remain within the target range in 2025 and converge toward the 3.5% target from 2026. The decision extended the unchanged 6.00% stance maintained at every prior 2025 meeting from January through July. In July, consumer price inflation was 0.4% on the month and 4.3% on the year, while inflation excluding food and energy commodities stood at 3.8% on the year and inflation expectations remained at 3.7% for the next 12 months and 3.5% over the monetary policy horizon; the CPM added that GDP is around its potential and cited June IMAEP growth of 4.8% year on year, with reduced exchange-rate pressures and an appreciating exchange rate contributing to lower durable goods prices. Externally, the CPM said trade tensions had moderated after recent U.S. tariff agreements, markets increasingly saw Federal Reserve rate cuts resuming in September after weaker U.S. labor data, and oil prices had fallen since the previous meeting after OPEC+ increased production. The CPM 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.