FX.co ★ Paraguay Maintains Interest Rate at 6%

In its October meeting, the Central Bank of Paraguay decided to maintain its policy interest rate at 6%. During the session, the committee considered various global economic factors, such as a slight increase in US inflation to 3.0% and a deceleration in job creation, amidst prospects of further rate cuts by the Federal Reserve. On the international front, oil prices continued on a downward trend, driven by forecasts of an oversupply by 2026 and a reduction in geopolitical tensions in the Middle East. Agricultural commodity trends diverged, with prices for corn and wheat decreasing, while soybean prices experienced an uptick. Domestically, Paraguay's economy demonstrated steady growth, as evidenced by a 4.5% rise in the Monthly Economic Activity Indicator for August, buoyed by sectors like services, manufacturing, agriculture, as well as electricity and water. Inflation remained subdued, registering an annual rate of 4.3%, with forecasts holding at 3.7% for the coming 12 months. The Central Bank Board reiterated its dedication to maintaining price stability and affirmed its vigilance over both domestic and international economic developments to ensure inflation aligns with the 3.5% target.