Paraguay Holds Interest Rate at 6%

The Central Bank of Paraguay cut its policy interest rate to 5.75% at its January meeting. The committee cited global developments including IMF estimates showing global growth at 3.3% in 2025 and 2026, while in the US GDP grew 4.4% annualised in Q3 2025, December job gains undershot expectations as unemployment fell to 4.4%, and annual inflation held at 2.7%, with markets still pricing further Federal Reserve cuts in 2026. Internationally oil prices rose amid geopolitical uncertainty despite oversupply expectations, while agricultural prices were mixed with soybeans rising and corn and wheat falling. Domestically the IMAEP grew 4.0% year on year in November supported by services, electricity and water, agriculture and livestock, while manufacturing softened. Inflation continued to ease with the CPI at -0.3% in December, annual inflation ending 2025 at 3.1%, and inflation expectations anchored at 3.5%. The CPM reaffirmed its commitment to price stability.

The Central Bank of Paraguay left its policy interest rate at 6% during its December meeting. The committee noted global developments including the Federal Reserve cutting its target range to 3.50%–3.75% in December with markets pricing further cuts in 2026, US employment in November beating expectations while unemployment rose to 4.6% and annual inflation eased to 2.7%. Internationally oil prices continued to decline amid global oversupply while agricultural prices were mixed with corn rising but soybean and wheat falling. Domestically the economy grew steadily with the Monthly Economic Activity Indicator up 5.7% year on year in October 2025 supported by services, manufacturing, agriculture and electricity and water. Inflation remained low with the monthly CPI at 0.2% in November and annual inflation at 4.1% while inflation expectations held at 3.7% for the next 12 months. The CPM reaffirmed its commitment to price stability.

The Central Bank of Paraguay left its policy interest rate at 6% during its October meeting. The committee noted global developments, including a modest rise in US inflation to 3.0% and stronger than expected job creation in September with unemployment rising to 4.4%, alongside a diminished probability of a further Federal Reserve rate cut in December. Internationally oil prices continued to decline amid a context of global oversupply, while agricultural commodities showed broad based strength with soybean, wheat and corn all rising on firmer short term demand. Domestically the economy grew steadily, with the Monthly Economic Activity Indicator up 6.7% year on year in September 2025, supported by services, manufacturing, agriculture and electricity and water. Inflation remained low, with the monthly CPI at -0.1% in October and the annual inflation rate at 4.1%, while expectations held at 3.7% for the next 12 months. The CPM reaffirmed its commitment to price stability.