The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously held the monetary policy rate at 5.50% annually in its March 20 decision, citing still-low inflation, inflation expectations anchored at the 3.5% target, continued economic expansion at a slower year-on-year pace, and the need to monitor external energy-price risks; after keeping the rate at 6.00% through 2025, the CPM cut it by 25 basis points in January and by a further 25 basis points in February. The Committee said the decision preserves a neutral monetary policy stance. February consumer price inflation was 0% on the month and 2.3% year on year, while CPI excluding food and energy stood at 2.1% year on year, and the CPM expects headline inflation to remain temporarily below target before converging to 3.5% toward the end of 2026. On activity, the Monthly Economic Activity Indicator of Paraguay (IMAEP) rose 0.9% year on year in January, while sales also increased and consumer confidence stood at 50.1 in February. Externally, the escalation of the Middle East conflict pushed oil above USD 100 per barrel and increased financial market volatility, reflected in a stronger U.S. dollar and higher long-term U.S. Treasury yields. The CPM reiterated that it will keep closely monitoring domestic and external developments and take timely measures to ensure compliance with the 3.5% target over the monetary policy horizon.
Central Bank of Paraguay2026-03-20
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 at 5.50% on 20 March, saying the decision maintains a neutral stance amid still-low inflation, inflation expectations anchored at the 3.5% target, continued but slower economic expansion, and external energy-price risks. February inflation was 2.3% year on year, with headline inflation expected to remain temporarily below target before converging to 3.5% toward end-2026.