The Central Bank of Paraguay’s Monetary Policy Committee unanimously held the monetary policy rate at 6.00% on December 22, citing a marked recent moderation in inflation alongside stronger-than-expected economic momentum; the TPM has been held at 6.00% at every meeting since January 2025. November headline inflation was 4.1%, while the Committee said disinflation has been driven by smaller increases in non-food goods and services, prompting it to revise down its 2025 inflation forecast to 3.6%, with inflation expectations at 3.7% over the next 12 months and 3.5% over the monetary policy horizon. On activity, it said momentum has strengthened, revising up its 2025 GDP growth forecast to 6.0%, while the Monthly Indicator of Economic Activity of Paraguay rose 5.7% year on year in October and large-company sales increased 7.0%. Externally, the Committee noted a weaker USD over the past month and said oil prices continued to fall amid global oversupply, while also highlighting the Federal Reserve’s December rate cut and market expectations of further easing in 2026. The CPM reaffirmed its commitment to price stability and said it will continue to monitor domestic and external developments closely to take timely measures to ensure compliance with the 3.5% target over the monetary policy horizon.
Central Bank of Paraguay2025-12-22
Central Bank of Paraguay Holds Policy Rate at 6.00%
The Central Bank of Paraguay’s Monetary Policy Committee unanimously kept the monetary policy rate at 6.00% on 22 December, where it has remained since January 2025, citing moderating inflation despite stronger-than-expected economic activity. The Committee revised down its 2025 inflation forecast to 3.6% and raised its 2025 gross domestic product growth forecast to 6.0%, while reaffirming its commitment to return inflation to the 3.5% target over the monetary policy horizon.