The Central Bank of Paraguay’s Monetary Policy Committee (MPC) unanimously held the monetary policy rate at 5.50% annually, maintaining a neutral stance as economic activity remained favorable and inflation low. The MPC has kept the rate unchanged since cutting it by a cumulative 50 basis points in January-February from 6.00%. Headline inflation stood at 1.6% year on year in July, while expectations remained anchored at the 3.5% target; the MPC expects inflation to rise gradually to 3.3% in December 2026 and converge to the target over the policy horizon. Economic activity grew 5.6% year on year in June and remained consistent with the 4.5% growth projection for 2026. Externally, elevated energy prices and Middle East tensions continued to create uncertainty, while agricultural commodity prices increased and markets anticipated a somewhat higher US Federal Reserve rate path. The MPC will continue monitoring domestic and external developments and take timely measures to ensure inflation meets the target.
2026-08-25Central Bank of Paraguay
Central Bank of Paraguay Holds Policy Rate at 5.50%
The Central Bank of Paraguay’s Monetary Policy Committee unanimously held the monetary policy rate at 5.50%, maintaining a neutral stance amid favorable economic activity and low inflation. Headline inflation was 1.6% year on year in July, while expectations remained anchored at the 3.5% target and economic activity grew 5.6% in June.