A recent agreement between the Inter-American Development Bank (IDB) and the Central Bank of Paraguay (BCP) will allow for sustained progress toward the modernization of the country’s financial system through the adoption of International Financial Reporting Standards (IFRS).

The South American country signed this agreement with the goal of “strengthening financial transparency, aligning the accounting practices of the Paraguayan banking system with international standards, and facilitating integration with global markets.”

The project, with an estimated duration of 18 to 24 months, includes a technical assessment to identify accounting, regulatory, and technological gaps. It also includes training for strategic staff, public-private discuss tables, and simulations of the impact on financial statements.

Ultimately, the project will be able to design a strategic roadmap for a gradual and sustainable transition to IFRS, an initiative framed within the IDB’s Capacity Building, Asset Management, and Advisory Services (CAsA) Program, effective July 2024, which supports central banks in Latin America and the Caribbean through technical assistance and institutional strengthening.

The Central Bank of Paraguay will be responsible for developing two complementary projects: “the adoption of IFRS, led by the Superintendency of Banks, and the implementation of a Risk-Based Supervision approach, led by the Superintendency of Securities,” aimed at “maximizing synergies in modernizing the regulatory framework and strengthening the technical supervisory capacity of the financial system.”

M.Pino

Source: finanzasdigital

(Reference image source: Tobias Meza on Unsplash)

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The Paraguayan Consumer Price Index (CPI) fell six tenths in August compared to the previous month and now stands at 2.9 % year-on-year, very close to the target range, according to what the Central Bank of Paraguay disclosed on Monday.

The August figure is the lowest since April 2021, the last time inflation was below 3 % in the country (specifically, 2.5 %). Since the slight rebound in prices in November 2022, the index in Paraguay has maintained a downward trend, already accumulating nine months in decline.

The greatest impact on year-on-year inflation in August occurred in goods and services, followed by food items in the shopping basket. In turn, fuel prices again registered a decrease, and this division is in the negative zone for the fifth consecutive month.

Meanwhile, in monthly terms, there has been a deflation of 0.2 %, this being the second time this year that a negative figure has been recorded. For its part, the accumulated rate is 2 %.

In the midst of this context, the central bank decided for the first time after several meetings to reduce interest rates by 25 basis points, to 8.25 %. The continued drop in inflation leads us to anticipate that, at the monetary policy meeting this September, it will once again opt to cut the rate.

Source: dpa

(Reference image source: Las Naves, Europa Press / dpa)

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