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.
Central Bank of Paraguay Holds Policy Rate at 5.50%
The Central Bank of Paraguay’s Monetary Policy Committee unanimously held its annual policy rate at 5.50%, maintaining a neutral stance amid low inflation and an improved growth outlook. The central bank lowered its year-end inflation forecast to 3.0% and raised its 2026 gross domestic product growth forecast to 5.0%.