Itaú BBA - Macro Scenario - Paraguay: More room for a rate cut

Macro Latam

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Macro Scenario - Paraguay: More room for a rate cut

julio 17, 2019

We expect a new monetary policy interest rate cut of 25 bps, leaving the rate at 4.5% for the end of the year.

For the full version with all charts and tables, please open the attached pdf file.

 

• The drop in the inflation rate due to a stronger currency and a more favorable external environment make room for a 25-bp point cut in the reference rate. We revised our exchange rate projection down to PYG 6,250/USD (from PYG 6,350/USD previously) for the end of 2019. While we maintain our inflation forecast of 4% for this year, we see downside risks.

• National accounts data confirmed the decline in GDP in 1Q19. According to leading indicators, activity will remain weak in 2Q19. We maintain our growth forecast for 2019 at 1.7%.

Juan Carlos Barboza
Diego Ciongo



For the full version with all charts and tables, please open the attached pdf file.

 



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