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LatinNews Daily - 26 January 2026
In brief: Paraguay lowers interest rates for first time in nearly two years
*Paraguay’s central bank (BCP) has announced it is lowering its benchmark interest rate by 25 basis points to 5.75%, marking its first rate cut since March 2024. According to a BCP statement, the decision, which was taken unanimously by the BCP’s monetary policy committee (CPM), stemmed from various factors. These include a monthly deflation rate of -0.3% in December, the stabilisation of annual inflation at 3.1% in 2025, year-on-year growth of 4% in November 2025, and the “resilience” of global economic activity despite the “climate of high uncertainty”. The BCP notes that the International Monetary Fund (IMF) estimated growth of 2.4% in Latin America and the Caribbean in 2025 and projected a 2.2% rise in 2026. The strength of the US economy and international oil prices were also mentioned as part of its decision to cut the interest rate. The BCP said it would continue monitoring domestic and international developments to “guarantee compliance” with the 3.5% inflation target.
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