Paraguay Central Bank Holds Rate at 5.50%

The Central Bank of Paraguay kept its benchmark interest rate unchanged at 5.50% during its May 2026 meeting. Policymakers noted that markets expect the US Federal Reserve to raise interest rates early next year. In commodity markets, oil prices remained highly volatile amid geopolitical tensions in the Middle East, while soybean, corn, and wheat prices increased due to adverse weather, higher production costs, and stronger global demand. Domestically, Paraguay’s Monthly Economic Activity Indicator grew 8.2% year-on-year in March, supported by services, manufacturing, and the primary sector. The Business Turnover Estimate also rose 9.2%, reflecting stronger sales across several categories. Meanwhile, consumer prices increased 0.8% in April, mainly driven by higher fuel prices, lifting annual inflation to 2.3%. Inflation expectations remained anchored at 3.5% for both the next 12 months and the monetary policy horizon.

The Central Bank of Paraguay maintained its benchmark interest rate at 5.50% at its April 2026 meeting. The committee cited global uncertainty and the IMF's downward revision of world growth to 3.1%. At the national level, the IMAEP grew by 3.8% year-on-year in February, with strong momentum in services and construction. Business sales (ECN) expanded by 4.8%, and consumer confidence remained in positive territory. Monthly inflation was 0.8% in March, putting the annual rate at 1.9%, with expectations anchored at 3.5% and a projected annual GDP growth of 4.2%. The central bank reaffirmed its commitment to price stability.

The Central Bank of Paraguay maintained its policy interest rate at 5.50% at its March 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 0.7% annualised in Q4 2025, February job gains undershot expectations as unemployment rose to 4.4%, and annual inflation held at 2.4%, with markets now pricing no further Federal Reserve cuts in 2026. Internationally oil prices rose past $100 per barrel amid geopolitical uncertainty despite oversupply expectations, while agricultural prices were mixed with moderate increases in soybeans, corn, and wheat. Domestically the IMAEP grew 0.9% year on year in January supported by services, electricity and water, and agriculture, while the business figures estimator rose 0.2%. Inflation continued to ease with the CPI at 0% in February, annual inflation reaching 2.3%, and inflation expectations anchored at 3.5%. The CPM reaffirmed its commitment to price stability.