FX.co ★ Paraguay Holds Interest Rate at 5.5%

Paraguay's central bank left its benchmark interest rate unchanged at 5.5% in July 2026. Policymakers noted that domestic economic activity continues to exceed expectations, leading them to raise the 2026 GDP growth forecast to 4.5% from 4.2%. The revision reflects improved prospects in agriculture, manufacturing, utilities, and services. At the same time, the inflation forecast for 2026 was cut to 3.3% from 3.5%, due to weaker price pressures for non-energy goods. Headline inflation slowed to 2.1% in June, while core inflation held at 1.1%, with inflation expectations remaining anchored at 3.5%. Despite the favorable domestic backdrop, the central bank underscored rising external risks, notably higher oil prices driven by tensions in the Middle East and expectations of additional interest rate hikes by the Federal Reserve.