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Bloomberg
Paraguay’s central bank lifted its benchmark interest rate by a quarter of a percentage point to 8.25% with inflation still in the low teens.
Policy makers continued a gradual pace of tightening after hiking by 25 basis points in July. The central bank signalled consumer prices might continue to slow in August.
“Lower international oil prices have contributed to a decline in local fuel prices in the first weeks of August, which would positively influence inflation that month,†the monetary authority said in a statement.
Paraguay is especially vulnerable to the inflationary effects of rising oil prices because it imports all of its fuel. After peaking at a 14-Year high of 11.8% in April, inflation gradually slowed to 11.1% last month.
Paraguay’s inflation rose for a fourth straight month to 11.8% in April.