The Central Bank of Paraguay’s Monetary Policy Committee (CPM) unanimously held the monetary policy rate at 6.00% on September 23, citing solid economic activity, low recent monthly inflation readings, inflation expectations aligned with target, and lower exchange-rate pressures, while projecting inflation to remain within the target range in 2025 and converge to the 3.5% target in 2026; the TPM has been unchanged at 6.00% since January 2025. August inflation was 0.1%, with core inflation at 0.3%, while year-on-year headline and core inflation stood at 4.6% and 4.0% respectively, and expectations remained at 3.7% for the next 12 months and 3.5% over the monetary policy horizon. On activity, the Monthly Indicator of Economic Activity rose 4.9% year on year in July, or 5.5% excluding agriculture and binational hydroelectric entities, and the Large Companies Sales Indicator increased 6.2%. Externally, the CPM noted slightly weaker U.S. dollar index levels and declining long-term U.S. Treasury yields over the past month, alongside reduced domestic exchange-rate pressures. It also pointed to easing trade tensions after U.S. tariff agreements with some countries, lower oil prices due to improved supply after OPEC+ production decisions, and the Federal Reserve’s 25 basis-point cut that set the federal funds target range at 4.0%-4.25%, with markets expecting further cuts this year. The CPM reiterated that it will closely monitor domestic and international developments and take timely

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