The Central Bank of Paraguay has approved a Liquidity Coverage Ratio regulation as part of its adoption of Basel III aligned practices. The measure is intended to strengthen liquidity management in the financial system by requiring adequate short-term coverage against stress scenarios and supporting financial stability. The rule forms part of the central bank’s broader framework for financial risk management and is intended to reinforce the control environment for adverse situations. In substance, the Liquidity Coverage Ratio requires banks to hold a sufficient stock of high-quality liquid assets that can be converted into cash easily and immediately to withstand a period of liquidity stress. The central bank also describes the LCR as a minimum standard for liquidity risk, with limited early warning value for detecting extreme funding spikes.
Central Bank of Paraguay2026-04-13
Central Bank of Paraguay approves Basel III aligned Liquidity Coverage Ratio regulation
The Central Bank of Paraguay has approved a Liquidity Coverage Ratio regulation aligned with Basel III to strengthen liquidity management and short-term stress resilience in the financial system. The rule requires banks to hold enough high-quality liquid assets to be converted quickly into cash during a liquidity stress period. It is framed as a minimum liquidity risk standard within the central bank’s broader risk management framework.