Paraguayan public entities favor term deposits for local currency, immediate liquidity for dollars

Public entities in Paraguay maintain substantial bank balances, totaling G. 19.459 trillion and US$1.272 billion as of June 2026, according to the Ministry of Economy and Finance. The management of these funds reveals a distinct strategy based on currency. In Paraguayan guaranis, nearly 60% of deposits are held in Certificates of Deposit (CDAs), indicating a preference for longer-term investments.

Conversely, dollar deposits show a strong inclination towards immediate liquidity. Over 88% of funds held in U.S. dollars are in demand deposits (vista) and current accounts, readily available for immediate use. This contrasts sharply with the guaraní deposits, where only about 40.8% are in liquid instruments.

This disparity in management suggests that public institutions tailor their financial strategies to the specific characteristics of each currency. Potential reasons for this include differing cash flow patterns, anticipated obligations, the availability of banking instruments, or a strategic pursuit of higher returns on surplus funds. However, a conclusive assessment requires further information.

From a public management perspective, holding a significant volume of liquid assets in dollars facilitates immediate payments and reduces the risk of fund shortages. On the other hand, placing a larger portion of guaraní funds in term deposits could enhance financial returns, provided that careful planning ensures funds are available when needed to avoid mismatches with obligations.