Banco Central del Paraguay's monetary operations executive committee, CEOMA, on Sept. 23 unanimously decided to lower its benchmark interest rate by 25 basis points to 4.00%, marking its third consecutive cut.
In a statement announcing the decision, the committee highlighted lower growth outlook in the world economy, with uncertainty driven by the trade conflict between the U.S. and China, as well as by geopolitical tensions in the U.K. and Saudi Arabia. The monetary body also pointed to the complex economic situation in neighboring Argentina in announcing the rate cut.
Domestic activity and demand indicators had improved, but accumulated growth rates remain negative, the central bank noted. Still, the regulator does not see inflationary pressures in the coming months.
"In this context, the committee considers it appropriate to adopt an even more accommodating monetary policy profile, compatible with the convergence of projected inflation to the annual 4% target in the relevant projection horizon," the committee members said.
The September rate decision follows 25-basis-point cuts in both July and August.
