- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 5.5%
The Central Bank of Paraguay’s Monetary Policy Committee unanimously held the monetary policy rate at 5.50% on June 23, 2026, saying the decision was consistent with a neutral policy stance as economic activity remains favorable and inflation is expected to stay below target in the coming months despite higher-than-anticipated fuel prices. The committee said Paraguay’s monthly economic activity indicator grew 3.4% year on year in April and reiterated projected economic expansion of 4.2% for 2026, while May consumer prices rose 2.4% from a year earlier and inflation expectations remained anchored at 3.5% for both the next 12 months and the monetary policy horizon. Externally, it noted that Brent crude had fallen to below USD 80 a barrel since the previous meeting, although Middle East geopolitical developments remain a significant source of uncertainty, while markets continue to anticipate Federal Reserve rate increases in coming months after the Fed kept its target range unchanged in June. The committee said it will continue to closely monitor external risks and assess their implications for the inflation path, taking any measures needed to ensure inflation converges to target over the 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.