- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 5.5%
The Central Bank of Paraguay’s Monetary Policy Committee (MPC) unanimously held the monetary policy rate at 5.50% annually, maintaining a neutral stance as economic activity remained favorable and inflation low. The MPC has kept the rate unchanged since cutting it by a cumulative 50 basis points in January-February from 6.00%. Headline inflation stood at 1.6% year on year in July, while expectations remained anchored at the 3.5% target; the MPC expects inflation to rise gradually to 3.3% in December 2026 and converge to the target over the policy horizon. Economic activity grew 5.6% year on year in June and remained consistent with the 4.5% growth projection for 2026. Externally, elevated energy prices and Middle East tensions continued to create uncertainty, while agricultural commodity prices increased and markets anticipated a somewhat higher US Federal Reserve rate path. The MPC will continue monitoring domestic and external developments and take timely measures to ensure inflation meets the target.
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.