Paraguay’s central bank left its benchmark interest rate unchanged at 5.50% at its August 2026 meeting, citing solid domestic activity and contained inflation. Economic activity expanded 5.6% year-on-year in June, consistent with the bank’s 4.5% growth projection for 2026, while business sales rose 4.1%.
Annual inflation slowed to 1.6% in July, with core inflation at 1.3%, and 12‑month inflation expectations remained anchored at 3.5%. The central bank anticipates that inflation will gradually increase to 3.3% by December and converge to 3.5% over the policy horizon.
Externally, uncertainty remains high due to geopolitical tensions, elevated oil prices, and expectations that the US Federal Reserve will keep interest rates higher for longer. The next monetary policy meeting is scheduled for September 21.
