Paraguay Central Bank Aims for 3.5% Inflation Rate by Mid-2026

Investing.com -- According to Carlos Carvallo, the President of the Central Bank of Paraguay, the bank aims to reduce price increases to a new inflation target of 3.5% by mid-2026. The current benchmark interest rate stands at 6%. Carvallo confirmed that adjustments, such as increases or decreases in interest rates, are not ruled out if necessary to achieve the new inflation target.

The monetary authority's current price increase forecast for the next year is set at 3.7%, slightly higher than this year's rate. Carvallo expressed confidence in the current monetary policy rate, stating that it is at a level that can guide inflation towards the central bank's new target.

Despite Carvallo's stance, some analysts foresee changes in the near future. A survey conducted by the central bank earlier this month revealed that analysts expect board members to reduce interest rates by half a percentage point to 5.5% next year.

Under Carvallo's leadership, borrowing costs have remained stable since April. Inflation has been recorded for 20 consecutive months and has fluctuated within a narrow range around the previous 4% target.