- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 5.5%
The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously kept the monetary policy rate at 5.50% annually in April 2026, citing continued expansion in economic activity, low current inflation, anchored expectations, and elevated external uncertainty linked to geopolitical tensions and energy prices; after cutting the rate from 6.00% to 5.75% in January and to 5.50% in February, the CPM has now held it unchanged for March and April. The Committee said short-term indicators continued to show growth early in the year, with the Monthly Economic Activity Indicator rising 3.8% year on year in February and the 2026 GDP growth projection maintained at 4.2%, while consumer confidence remained in optimistic territory. Inflation projections for 2026 were also kept at the 3.5% target, with March headline inflation at 1.9% year on year and inflation expectations anchored at 3.5% for both the next 12 months and the monetary policy horizon, even as monthly CPI rose on fuel and other volatile items. Externally, the CPM highlighted persistent uncertainty from tensions in the Middle East, an International Monetary Fund downgrade of 2026 global growth to 3.1% alongside a higher global inflation forecast of 4.4%, volatile oil prices with Brent near USD 95 per barrel, and higher soybean, corn, and wheat prices. The Committee said it will continue to closely monitor external risks and take timely measures to ensure inflation converges to 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.