- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 5.5%
The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously held the monetary policy rate at 5.50% annually in its March 20 decision, citing still-low inflation, inflation expectations anchored at the 3.5% target, continued economic expansion at a slower year-on-year pace, and the need to monitor external energy-price risks; after keeping the rate at 6.00% through 2025, the CPM cut it by 25 basis points in January and by a further 25 basis points in February. The Committee said the decision preserves a neutral monetary policy stance. February consumer price inflation was 0% on the month and 2.3% year on year, while CPI excluding food and energy stood at 2.1% year on year, and the CPM expects headline inflation to remain temporarily below target before converging to 3.5% toward the end of 2026. On activity, the Monthly Economic Activity Indicator of Paraguay (IMAEP) rose 0.9% year on year in January, while sales also increased and consumer confidence stood at 50.1 in February. Externally, the escalation of the Middle East conflict pushed oil above USD 100 per barrel and increased financial market volatility, reflected in a stronger U.S. dollar and higher long-term U.S. Treasury yields. The CPM reiterated that it will keep closely monitoring domestic and external 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.