The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously left the monetary policy rate (TPM) unchanged at 5.50% on May 22, 2026, saying short-term activity indicators remain favorable and inflation is temporarily below the 3.5% target but should converge toward it in the second half of the year, while external uncertainty persists. After two 25 bp cuts in January and February from 6.00% to 5.50%, the CPM has held the rate unchanged since March. The Committee said the decision keeps monetary policy consistent with a neutral profile. Domestically, it cited projected gross domestic product growth of 4.2% for the year, March growth in the Monthly Indicator of Economic Activity of Paraguay (IMAEP) of 8.2% year on year, April headline inflation of 2.3% year on year, and inflation expectations anchored at 3.5% for both the next 12 months and the policy horizon. Externally, it noted a slight appreciation in the US dollar index and higher long-term US Treasury yields, while highlighting persistent uncertainty over the Middle East conflict and higher oil and agricultural commodity prices, with Brent crude around USD 107 per barrel. The CPM said it will continue to closely monitor external risks and take timely measures to ensure inflation converges to target over the monetary policy horizon.
Central Bank of Paraguay2026-05-22
Central Bank of Paraguay Holds Policy Rate at 5.50%
The Central Bank of Paraguay’s Monetary Policy Committee unanimously kept the monetary policy rate unchanged at 5.50% on 22 May 2026, maintaining a neutral stance after two 25 basis point cuts in January and February, as domestic activity remains strong and inflation, at 2.3% year on year in April, is expected to converge to the 3.5% target in the second half of the year. The Committee projected 2026 gross domestic product growth of 4.2% and said it will continue to monitor external risks including Middle East uncertainty, higher oil and agricultural commodity prices, a firmer US dollar, and higher long-term US Treasury yields.