Central Bank of Paraguay's Inflation Target

Investing.com — Paraguay's central bank aims to reduce price increases to its new 3.5% inflation target by mid-2026, as stated by Chairman Carlos Carvallo. The current benchmark interest rate is 6%. Carvallo confirmed that adjustments to this rate, including hikes or easements, are possible if deemed necessary to meet the new inflation target.

The monetary authority currently estimates price increases for the upcoming year at 3.7%, slightly above this year's rate. Carvallo expressed confidence in the current monetary policy level, which should guide inflation toward the central bank’s new objective.

Despite Carvallo's assurances, some analysts predict potential changes soon. A recent survey conducted by the central bank indicated that analysts expect board members may lower rates by half a percentage point to 5.5% in the coming year.

Under Carvallo’s leadership, borrowing costs have remained steady since April. Inflation has been consistently recorded for 20 consecutive months, remaining within a narrow range around the previous target of 4%.

This article was generated with the support of AI and reviewed by an editor. For more information, see our T&C.