Economics
Paraguay Central Bank Cuts Key Rate to 0.75% to Aid Economy
- Bank sees contained inflation pressures in coming months
- Policy makers see economic downturn moderating in May
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Paraguay’s central bank cut its benchmark interest rate by 50 basis points to 0.75% as below-target inflation allows it to adopt looser monetary policy to aid the economy.
Inflationary pressures are expected to be contained in coming months due to weak domestic demand and expectations of further deterioration in the economies of Paraguay’s main trading partners, the bank said in a statement published on its website. The annual inflation rate fell to 0.7% in May, the lowest in more than two decades. The central bank targets inflation of 4%.