Paraguay's Central Bank sets May interest rate caps for bank loans

The Central Bank of Paraguay (BCP), through the Superintendency of Banks (SIB), has announced the maximum interest rates that financial institutions can charge for loans in May. For loans in Paraguayan Guaraní, the cap is set at 27.05% annually, a marginal increase from the previous month's 27.02% and still below the 28.31% rate seen a year ago. Meanwhile, interest rates for loans in foreign currency will be capped at 11.21%, slightly higher than April's 11.16%. These stable rates reflect the normalization of the BCP's benchmark interest rate, currently at 5.50% following two consecutive reductions. ABC Color reports that this stability is expected to continue influencing market rates. The article clarifies that interest rates exceeding these limits will be considered usurious. This measure aims to protect consumers from excessive charges, particularly on consumer loans. The BCP's proactive stance in regulating interest rates underscores its commitment to financial stability and consumer protection within Paraguay. The slight adjustments indicate a careful balancing act, responding to monetary policy shifts while maintaining a degree of predictability for borrowers and lenders alike. The focus remains on ensuring fair lending practices and preventing predatory financial behavior.

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Los bancos y financieras del país podrán cobrar hasta una tasa del 27,05% de interés anual en el mes de mayo próximo, valor casi similar al mes vigente, informó la Superintendencia de Bancos (SIB).