FX.co ★ Paraguay Leaves Interest Rate Unchanged

In its August meeting, the Central Bank of Paraguay unanimously opted to maintain the policy interest rate at 6%. The committee noted several positive domestic economic indicators, including a 4.8% rise in Paraguay's monthly economic activity in June and a 5.6% increase in business activity, buoyed by the services, manufacturing, and agricultural sectors. Inflation levels were moderate, with a monthly rise of 0.4% and an annual rate of 4.3%, while core inflation aligned with projections at 3.8%. On the international stage, there was an improvement in global economic growth forecasts, commodity prices exhibited varied trends, and U.S. employment data heightened the probability of a Federal Reserve rate reduction in September. The Monetary Policy Committee (MPC) stressed that inflation is anticipated to stay within the target range for 2025, with a convergence toward 3.5% expected by 2026. Reaffirming its dedication to price stability, the committee committed to closely monitoring both domestic and international developments to ensure the achievement of its policy objectives.