Paraguay Interest Rate

The Central Bank of Paraguay unanimously decided to maintain its policy rate at 6.0% during its December 2024 meeting, citing mixed global and domestic developments. In the US, job creation in November exceeded expectations, while inflation rose to 2.7%, prompting the Federal Reserve to cut its target rate by 25 basis points to 4.25%-4.50%, with fewer cuts expected in 2025. Domestically, Paraguay’s economic activity grew 5.1% in October, driven by services, manufacturing, construction, livestock, and agriculture, with retail sales increasing 7.6% year-on-year. Consumer confidence remained optimistic at 55.6. November CPI inflation was 0.2%, with annual inflation easing to 3.4%, from 3.6% in October, aligning with the 4.0% target. The committee reaffirmed its commitment to price stability, noting that inflation risks are balanced and that the inflation target has been consistently met, despite the volatility of certain food prices, particularly beef.