The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously held the monetary policy rate at an annual 5.50%, maintaining a neutral stance as favorable economic activity and low inflation remained consistent with convergence to target. The rate was lowered by a cumulative 50 basis points from 6.00% in January-February 2026 and has since been held. Headline inflation eased to 1.5% year on year in August, driven mainly by low goods-price inflation, while the CPM projects 3.3% at year-end and convergence to the 3.5% target, with expectations aligned. Economic activity remained consistent with projected growth of 4.5% in 2026, supported in July by services, electricity and water, manufacturing and agriculture. The US dollar appreciated and long-term Treasury yields rose, while Brent crude exceeded USD 100 per barrel amid the escalating Middle East conflict and associated supply risks. Agricultural commodity prices also increased and the Federal Reserve raised its target range. The CPM said it will continue monitoring domestic and external developments and take timely action to ensure inflation meets the target over the policy horizon.
2026-09-21Central 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 low inflation and resilient economic activity. It projects 2026 growth of 4.5% and year-end inflation of 3.3%, converging to the 3.5% target, while monitoring heightened external risks.