- 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 December 22, citing a marked recent moderation in inflation alongside stronger-than-expected economic momentum; the TPM has been held at 6.00% at every meeting since January 2025. November headline inflation was 4.1%, while the Committee said disinflation has been driven by smaller increases in non-food goods and services, prompting it to revise down its 2025 inflation forecast to 3.6%, with inflation expectations at 3.7% over the next 12 months and 3.5% over the monetary policy horizon. On activity, it said momentum has strengthened, revising up its 2025 GDP growth forecast to 6.0%, while the Monthly Indicator of Economic Activity of Paraguay rose 5.7% year on year in October and large-company sales increased 7.0%. Externally, the Committee noted a weaker USD over the past month and said oil prices continued to fall amid global oversupply, while also highlighting the Federal Reserve’s December rate cut and market expectations of further easing in 2026. The CPM reaffirmed its commitment to price stability and said it will continue to monitor domestic and external developments closely to 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.