Bank Loan Rates in Paraguay: A Mixed Bag of Trends
While the average interest rate for bank-granted loans in Paraguay saw a slight uptick on a monthly basis, the overall picture reveals a more favorable trend for borrowers compared to a year ago. The Central Bank of Paraguay (BCP) published its latest financial indicators report, shedding light on the evolving landscape of lending rates across the nation.
A Peek into the Numbers
The active interest rate for loans denominated in national currency hit 13.35% in October, representing a marginal increase of 0.39 percentage points from the previous month. However, when measured against the same period last year, a noteworthy dip of 1.76 percentage points is evident. This year-on-year reduction is attributed to the effect of the BCP’s lower monetary policy rate, which currently stands at 6%.
Segment-Specific Insights
A closer look at individual loan categories reveals a mixed bag of trends. Consumer loans experienced a monthly uptick in interest rates, reaching 20.73% in October. This figure, while higher than the average 19.53% recorded in September, remains below the 21.3% charged in September of the preceding year.
Interest rates for credit cards saw a slight decrease in October, settling at 15.12% compared to 15.29% the month before. Still, this rate remains lower than the 17.66% charged for credit cards in September of 2023.
Housing loans demonstrated a small monthly decline in interest rates, falling from 10.15% in September to 10.04% in October. Despite this downward trend, rates for housing loans remain below the levels observed a year earlier.
Savings Rates See Modest Rise
The weighted average interest rate for savings accounts (passive rate) in national currency showed a slight increase in October, reaching 4.44%. This figure represents an uptick from the 4.34% average observed in September but falls short of the 4.83% recorded in October 2023.
The Intermediation Margin
The banks’ financial intermediation margin – the difference between active and passive rates – stood at 8.95% in October 2024. This figure was 0.33 percentage points higher than the result from the previous month but 1.33 percentage points lower compared to the same period in 2023.
What are the current trends in bank loan rates in Paraguay?
## Bank Loan Rates in Paraguay: An Interview
**Host:** Welcome back to the show. Today we’re discussing the latest trends in bank loan rates in Paraguay. Joining me is Alex Reed, [Alex Reed Title] with expertise in Paraguayan financial markets.
**Alex Reed:** Thanks for having me.
**Host:** So, the Central Bank of Paraguay published its latest financial indicators report, and it seems there’s a bit of a mixed bag when it comes to interest rates. Can you give us the rundown?
**Alex Reed:** Absolutely. While we saw a small uptick in the average interest rate for loans in Paraguayan guarani in October, reaching 13.35%, this increase was only a marginal 0.39 percentage points. The key takeaway here is that borrowers are actually in a better position compared to a year ago. [[1](https://financesone.worldbank.org/ibrd loans to paraguay/DS01077)]
**Host:** That’s interesting. Why do you think we’re seeing these lowered rates despite the recent increase?
**Alex Reed:** There are a few factors at play. The Paraguayan economy has shown some resilience, and the Central Bank has taken steps to maintain financial stability. Additionally, international lending institutions like the World Bank continue to offer loans to Paraguay at market rates, which can help keep domestic rates competitive [[1](https://financesone.worldbank.org/ibrd loans to paraguay/DS01077)].
**Host:** So, is this good news for businesses and individuals looking to borrow money in Paraguay?
**Alex Reed:** It certainly appears so, particularly when compared to the rates we saw a year ago. However, it’s important to remember that interest rates are dynamic and can fluctuate based on a variety of economic factors. Borrowers should always carefully consider their options and consult with financial experts before making any major decisions.
**Host:** Sage advice. Thank you for your insights, Alex Reed.
**Alex Reed:** My pleasure.
