Paraguay Stands Firm At 6% Rate Amid Rising Prices

(MENAFN- The Rio Times) Paraguay's central bank held its benchmark rate at 6% for the eighteenth month in September, underscoring its commitment to steady policy despite rising inflation.

The Monetary Policy Committee acted unanimously, even as August's annual inflation climbed to 4.6%, fueled mainly by higher beef and poultry prices. Meanwhile, domestic economic activity remains robust.

The central bank's Monthly Economic Activity Indicator grew nearly 5% in July, driven by services, manufacturing, construction, and livestock. Core inflation stood at 4.0%, suggesting that broader price pressures stay contained.

Importantly, Paraguay 's inflation target of 3.5% plus or minus two points still holds credible sway. Surveyed analysts expect the policy rate to stay at 6% through year-end, with potential 50-basis-point cuts in 2026 once supply pressures ease.

Their medium-term inflation outlook remains anchored at 3.5%, reflecting durable confidence in the central bank 's approach. Beyond numbers, this policy pause reveals Paraguay's growing economic maturity.



While major economies ease, Paraguay resists external trends by prioritizing domestic stability. It balances temporary food-price spikes against the bigger picture of steady growth.

This stance supports investment-grade ratings and keeps foreign capital flowing. Ultimately, the story here is one of an emerging market choosing consistency over reaction.

Paraguay's policymakers show that disciplined monetary policy can navigate temporary shocks without sacrificing credibility. For international observers, this signals a small economy ready to chart its own course amid global uncertainty.

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