- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 6%
The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously kept the monetary policy rate (TPM) at 6.00% on October 24, citing better-than-expected economic activity, contained recent headline and core inflation, inflation expectations aligned with target, and reduced exchange-rate pressures, while projecting inflation to end 2025 at 4.0% and converge to the 3.5% target in 2026, after holding the TPM at 6.00% at every meeting from January through September 2025. The Committee said the September Monetary Policy Report raised the 2025 GDP growth forecast to 5.3%, with August IMAEP up 4.5% year on year, while September CPI fell 0.1% month on month and annual inflation stood at 4.3%. It added that exchange-rate appreciation and lower fuel prices had helped contain inflation, while in global markets the International Monetary Fund (IMF) revised up global and Latin America and the Caribbean growth forecasts, markets continued to expect further Federal Reserve rate cuts, the U.S. dollar appreciated and long-term Treasury yields declined, and oil prices kept falling on projected excess supply for 2026 and reduced Middle East tensions.
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.