FX.co ★ Paraguay Leaves Interest Rate at 6%

In May 2025, the Central Bank of Paraguay decided to maintain its benchmark interest rate at 6%, attributing this decision to consistent economic growth and stable inflation trends. This unanimous decision demonstrates confidence in Paraguay's macroeconomic stability amidst both external and domestic challenges. In the United States, although the economy contracted in the first quarter of 2025, job growth remained robust and inflation decelerated to 2.3%. However, long-term inflation expectations have increased. Domestically, economic activities continued to grow, evidenced by a 4.4% annual increase in the IMAEP index in March, powered by the services, manufacturing, construction, and energy sectors. April’s inflation rate was recorded at 0.4%, leading to an annual rate of 4%, with rising food prices being significant contributors. For 2025, inflation expectations remained stable at 4%, though short-term expectations increased to 3.8%. The committee reaffirmed its commitment to maintaining price stability and will diligently monitor both global and domestic developments to ensure inflation aligns with its target of 3.5% over the policy horizon.