The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously cut the monetary policy rate (TPM) by 25 basis points to 5.75% from 6.00% on January 23, 2026, judging that inflationary pressures have moderated, inflation is expected to keep decelerating through most of 2026 and converge to the 3.5% target by year-end, and inflation expectations have consolidated around that target while monetary policy remains neutral; after holding the TPM at 6.00% from January through December 2025, the CPM eased in January 2026. December consumer price inflation was -0.3% month on month and 3.1% year on year, while CPI excluding food and energy rose 0.2% on the month and 2.3% on the year, and expectations for both the next 12 months and the monetary policy horizon stood at 3.5%. The CPM said economic activity kept positive momentum in the fourth quarter of 2025, consistent with a 6.0% growth estimate, and projected 2026 GDP growth at 4.2%, with November IMAEP up 4.0% year on year and the Large Companies Sales Indicator rising 6.3%. Externally, it cited resilient global activity amid heightened uncertainty, with the International Monetary Fund estimating 2025 growth at 3.3% globally and 2.4% in Latin America and the Caribbean, while oil prices rose on geopolitical tensions, soybean prices increased, the U.S. dollar index appreciated slightly and long-term U.S. Treasury yields rose. The CPM reiterated that it will closely monitor domestic and external developments and take timely
Central Bank of Paraguay2026-01-23
Central Bank of Paraguay cuts policy rate by 25 bps to 5.75%
The Central Bank of Paraguay’s Monetary Policy Committee unanimously cut the monetary policy rate by 25 basis points to 5.75% from 6.00% on 23 January 2026, its first easing after holding rates unchanged through 2025, citing moderating inflationary pressures and inflation expectations anchored at the 3.5% target. The committee expects inflation to continue decelerating through most of 2026 and converge to target by year-end, while projecting 2026 gross domestic product growth at 4.2% and reiterating that it will monitor domestic and external developments closely.