Paraguay Cuts Rate to 5.5%, Sees Low Inflation Most of 2026

Paraguay lowered borrowing costs by a quarter of a percentage point to 5.50%, with policymakers saying they expect inflation to remain below target most of the year.

The decision on Friday surprised analysts who expected policymakers to leave the key interest rate unchanged following a quarter-point cut in January. The central bank, which targets 3.5% inflation with a tolerance of plus or minus two percentage points, said monetary policy currently has a neutral stance.