Paraguay Lifts Key Rate to 6.25% as Inflation Accelerates
-
Loading... - Phoebe Edwards
- 23 Mar 2022
- 382 Views
- 0 Like
- 0 Comment
Paraguay’s central bank increased its benchmark interest rate to a seven-year high on Tuesday in a bid to slow inflation that’s now running at its fastest pace in more than a decade.
Policy makers lifted their key rate by 50 basis points to 6.25% following a 25 basis point hike in February. Inflation is expected to gradually converge with the 4% target, board members said in a statement after their monthly rate-setting meeting.
Latin American central banks were already struggling to contain above target consumer price increases before Russia’s invasion of Ukraine sent additional inflationary shocks rippling through the global economy. Paraguay, which imports all of its fuel, saw inflation accelerate to 9.3% last month, from 7.9% in January.
Fuel and foodstuffs such as fruits and vegetables represented almost 70% of inflationary pressures that month.
Expectations of slower growth this year due to a drought could limit inflationary pressures in the economy, the central bank said. Read More…
