Central Bank of Paraguay holds policy rate at 6.00%

The Central Bank of Paraguay’s Monetary Policy Committee unanimously held the monetary policy rate at 6.00% on July 22, 2025, citing strong domestic activity, an upwardly revised 2025 inflation forecast and medium-term inflation expectations that remain aligned with the 3.5% target; the TPM has been unchanged at 6.00% in every meeting from January through July 2025. June consumer price inflation was 0.0% month on month, with annual CPI inflation at 4.0% and CPI excluding food and energy at 4.1%, while inflation expectations stood at 3.7% for the next 12 months and 3.5% over the monetary policy horizon. The Committee said economic activity remained dynamic, with the Monthly Indicator of Economic Activity rising 6.2% year on year in May, and revised its 2025 GDP growth projection up to 4.4% from 4.0%, while lifting its 2025 inflation forecast to 4.0% from 3.8%, reflecting higher prices in other food items, especially meat, despite a second-quarter reversal in volatile CPI components. Externally, it pointed to renewed uncertainty around United States economic policy, rising oil prices, and higher U.S. dollar and long-term U.S. Treasury yields since the previous meeting, while markets continue to anticipate that Federal Reserve rate cuts will resume in the second half of the year. The Committee said it will keep closely monitoring domestic and international developments and take timely measures to ensure compliance with the 3.5% target over the monetary policy horizon.