Central Bank of Paraguay Holds Policy Rate at 6.00%

The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously held the monetary policy rate (TPM) at 6.00% on April 23, 2025, saying inflation expectations over the monetary policy horizon remain around the 3.5% target even as economic activity has shown positive momentum and some price pressures have appeared outside volatile consumer basket components. The TPM has been unchanged at 6.00% in each decision since January 2025. March consumer price inflation was 1.2% month on month and 4.4% year on year, driven mainly by volatile items, while inflation excluding food and energy was 0.2% on the month and 4.2% on the year; the CPM said a reversal in the volatile-price increases is expected in coming months, although it also identified pressures in some food and other goods components, and it slightly raised its 2025 inflation forecast to 3.8%. The committee also revised its 2025 GDP growth projection up to 4.0%, citing positive activity data including 4.9% year-on-year growth in the Monthly Indicator of Economic Activity in February and consumer confidence remaining in the optimism zone in March. Externally, the CPM pointed to significantly higher global market volatility from escalating trade tensions, alongside a weaker USD and higher long-term U.S. Treasury yields since the previous meeting, while crude oil prices declined and agricultural commodity prices remained volatile. The committee reaffirmed its commitment to price stability and said it will keep closely m