The Central Bank of Paraguay has widened the limits for foreign exchange forward contracts between financial institutions and resident economic agents, allowing banks to provide more currency hedging to companies and individuals. The change is intended to improve management of exchange rate risk and support the development of Paraguay's financial market. The rule updates the calculation of the net long or short position in resident forward contracts from two times to three times average daily volume. Under the new framework, the limit cannot exceed the lower of three times banks' average daily foreign exchange trading volume over the last three months, calculated as purchases plus sales divided by two, or 80% of the previous month's effective capital converted into USD. The central bank linked the measure to its broader effort to deepen domestic financial markets. It also referred to earlier rule changes that created exceptions to allow greater forward hedging capacity for nonresident holders of guarani-denominated sovereign bonds.
Central Bank of Paraguay2025-08-21
Central Bank of Paraguay expands resident FX forward limits to three times average daily volume with an 80 percent capital cap
The Central Bank of Paraguay has raised the limit for resident FX forward positions, giving banks more room to offer currency hedging to companies and individuals. The cap now uses three times average daily volume instead of two times, subject to the lower of that amount or 80% of the previous month's effective capital converted into USD. The measure is part of a wider push to deepen Paraguay's financial and derivatives markets.