- 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% in its November 21, 2025 statement, citing strong economic momentum, easing year-on-year inflation, expectations in line with target, lower exchange-rate pressures and an economy operating around its potential level, with inflation projected at around 4.0% at end-2025 and converging to the 3.5% target during 2026, and the TPM has remained at 6.00% throughout 2025, including in October. Domestic indicators stayed firm, with the Monthly Indicator of Economic Activity of Paraguay (IMAEP) rising 6.7% year on year in September and the Large Companies Sales Indicator (ECN) increasing 8.4%, while October consumer price inflation was -0.1% month on month and 4.1% year on year, and inflation excluding food and energy stood at 2.3%; inflation expectations were 3.7% for the next 12 months and 3.5% over the monetary policy horizon. The CPM said appreciation of the local currency, together with lower international oil prices, helped reduce prices of non-food goods, some services and fuels. Externally, it noted that the Federal Reserve cut rates at end-October but markets now assign a lower probability to another December cut, while Treasury yields and the USD rose, and oil prices continued to fall amid global excess supply. The committee reaffirmed its commitment to price stability and said it will continue to monitor domestic and external developments closely 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.