- Decision
- Maintain
- Rate change
- 0 bps
- policy interest rate
- 5.5%
The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously held its annual policy rate at 5.50%, maintaining a neutral stance amid low inflation and an improved growth outlook, following cumulative cuts of 50 basis points from 6.00% in January and February 2026. Annual headline inflation stood at 1.7% in September, with inflation measures remaining near the lower bound of the target’s tolerance range. The central bank lowered its year-end inflation forecast to 3.0%, as more moderate non-energy goods prices counteracted higher fuel prices, while expectations remained anchored at the 3.5% target. It raised its gross domestic product growth forecast for 2026 to 5.0%, mainly reflecting better prospects for services and electricity and water. Externally, persistent Middle East tensions kept oil prices elevated, while markets anticipated a higher Federal Reserve interest-rate path over the remainder of 2026 and in 2027. The CPM pledged to monitor domestic and external developments and take timely measures to ensure inflation meets the 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 as economic activity remained consistent with the 4.5% growth forecast, headline inflation declined to 1.6% in July and inflation expectations remained anchored at 3.5%.
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 remained in line with the 4.5% growth forecast, headline inflation eased to 1.5% in August and inflation expectations remained aligned with the 3.5% target.
On 23 October, the committee unanimously held the policy rate at 5.50%, maintaining a neutral stance as it raised its 2026 growth forecast to 5.0% from 4.5% and lowered its year-end inflation forecast to 3.0% from 3.3%. Headline inflation stood at 1.7% in September and inflation expectations remained anchored at 3.5%, while the committee continued to flag risks from Middle East tensions and their potential effects on energy prices, alongside expectations of higher Federal Reserve interest rates for the remainder of 2026 and in 2027.