The Central Bank of Paraguay (BCP) has again lowered interest rates, this time from 6.25% to 6.00%. It marks the eighth consecutive reduction in rates since August 2023.
Announcing the move in a statement, the BCP pointed to “better than expected” data for employment figures as well as the overall Gross Domestic Product (GDP).
It also highlighted the growth of the Paraguayan Monthly Economic Activity Indicator (IMAEP), which surged 5.5% in January, while the Economic Climate Indicator soared by 11.3% year-on-year. Consumer confidence remained positive, with the Consumer Confidence Index standing at 56.4 in February, and inflation expectations “have remained in line with the 4% target” in 2024.
Monthly inflation, as measured by the Consumer Price Index, remained stable at 0% in February, while year-on-year inflation moderated to 2.9%, lower than January’s 3.4%, and lower still than the 4% inflation target set by the BCP. The Committee reiterated its commitment to price stability, monitoring local and external developments closely to ensure the 4% target is met.
Interest rates were held at a record 8.5% for ten months straight, from September 2022 through July 2023, and have been steadily falling since then. Analysts expect further rate cuts to to be applied throughout 2024.
