Paraguay's central bank held its monetary policy rate steady at 5.75 percent, saying the path of inflation was in line with the bank's 4.5 percent medium-term target and there are no inflationary risks at the moment.
The Central Bank of Paraguay, which has cut its rate by 100 basis points this year with the most recent cut in July, added in a statement from Aug. 20 that the policy decision by its Open Markets Operations Committee (CEOMA) was unanimous.
The central bank noted the weakening growth prospects in South America and said that it would use its instruments "with flexibility in order to mitigate the effects of possible external shocks."
The consumer price inflation rate in July rose to 3.6 percent, the highest rate since December last year, from 2.5 percent in June. The central bank targets inflation of 4.5 percent, plus/minus 2 percentage points.
Paraguay's Gross Domestic Product expanded by 0.7 percent in the first quarter from the previous quarter for annual growth of 4.2 percent, down from 5.8 percent in the fourth quarter of 2014.