Informe de política monetaria. Junio 2013

Abstract

The Central Bank of Paraguay (BCP) is the country's economic authority, mandated by the National Constitution to design and implement monetary policy. By legal mandate (Law No. 489/95, Organic Law of the Central Bank of Paraguay), its fundamental objectives are to preserve and ensure the stability of the value of the currency and promote the efficiency and stability of the financial system. The BCP implements its monetary policy to achieve its objectives, on the one hand, by controlling the interest rate or the cost of money, from a short-term perspective; and on the other hand, by controlling the supply or availability of money, from a medium-term perspective. Both strategies seek to influence the performance of a set of intermediate variables that influence the trajectory of inflation and allow for the creation of conditions for long-term economic stability. Traditionally, the BCP's monetary policy has centered on a Monetary Aggregate Control Scheme, especially the most liquid type, known as MO (banknotes and coins in circulation), whose growth trajectory is established annually in the monetary program approved by the BCP's Board of Directors.