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Paraguay Keeps Rate Steady, But Growth Easing

This article originally appeared on CentralBankNews.info on October 23, 2018. It is reproduced here with permission from the author.

Paraguay’s central bank maintained its monetary policy rate at 5.25 percent for the 15th month in a row but said the more complex international environment is being reflected in lower-than-expected economic domestic growth.

The Central Bank of Paraguay (BCP), which has kept its rate steady since cutting it by 25 basis points in August 2017, said the economic outlook for the South American region remains fragile due to the decline in Argentina’s economic growth.

As in recent months, the decision by BCP’s monetary policy committee was unanimous.

Paraguay’s gross domestic product grew by an annual 6.2 percent in the second quarter of this year, up from 4.7 percent in the first quarter while inflation has been relatively stable in recent months , close to the central bank’s goal of 4.0 percent, plus/minus 2 percentage points.

Headline inflation rose slightly to 4.0 percent in September from 3.9 percent in August while the exchange rate of the guarani has been depreciating steadily this year.

Today the guarani was trading at 5,906 to the U.S. dollar, down 5.3 percent this year.

This article originally appeared on CentralBankNews.info on October 23, 2018. It is reproduced here with permission from the author.

 

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