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Paraguay central bank cuts interest rate to 4.25%

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Paraguay central bank cuts interest rate to 4.25%

Banco Central del Paraguay cut its monetary policy interest rate by 25 basis points to 4.25% on Aug. 21, citing slower economic growth and reduced inflationary pressures.

Several indicators suggest that economic activity has declined during the first half of 2019, the central bank said. In addition, the monetary authority does not see any relevant inflationary pressures appearing over the next months.

Meanwhile, increased uncertainty mainly due to the U.S.-China trade tensions have led to a slowdown in global economic activity and increased the likelihood of a more accommodative stance from the U.S. Federal Reserve, the central bank said.

The central bank also cited a complex economic panorama in the region, following the results of the Argentine primaries and slow growth seen in preliminary figures from neighboring Brazil.

In this context, the central bank sees the monetary easing process as compatible with the convergence of inflation to its 4% target.