Paraguay’s Guaraní Hits Its Strongest Level Against the Dollar Since 2018
Paraguay · CURRENCY
Key Facts
- —Exchange rate The guaraní closed near 5,990 per US dollar on 28 August 2026.
- —Year to date The dollar has shed about 9% of its guaraní value since December 2025.
- —Twelve months The guaraní has gained about 18.4% on the dollar since 28 August 2025.
- —Policy rate Paraguay’s central bank held its rate at 5.50% on 25 August 2026.
- —Reserves Net international reserves stood at US$11.45 billion on 21 August 2026.
Record soybean receipts have lifted the currency, and the chambers that earn in dollars are unhappy.
Paraguay’s appreciating guaraní closed near 5,990 to the US dollar on Friday 28 August 2026, its strongest level since late 2018. The move has turned a quiet currency into the loudest argument in the country’s business chambers.
Where the guaraní now stands
The Banco Central del Paraguay (BCP) publishes a daily reference rate drawn from interbank spot trades. Market pricing on Friday 28 August 2026 put the dollar at about 5,990 guaraníes.
The last quote of 2025 was 6,575.71, set on 30 December. The dollar has therefore shed about 9% of its guaraní value so far this year.
A year earlier, on 28 August 2025, the same rate stood at 7,340.01. Measured against the dollar, the guaraní has gained about 18.4% over twelve months.
The weakest point in the whole BCP series was 8,029.54, reached on 2 April 2025. Paraguay’s appreciating guaraní has since pushed the dollar about 25% below that mark.
The guaraní was last this strong in late 2018, when the reference rate briefly dipped toward 5,911 to the dollar.
What is pulling the dollar down
Export receipts did much of the work behind Paraguay’s appreciating guaraní. Total exports reached US$12.13 billion in the seven months to July 2026, up 25.2%.
Soybean shipments led at US$2.65 billion, a rise of 49.0% on the year. Volumes climbed 40.8% to 6.83 million tonnes after an unusually large harvest.
Soybean meal added US$1.42 billion and soybean oil US$390.7 million. Paraguay ran a trade surplus of US$679.1 million, against a deficit twelve months earlier.
Beef did not help. Shipments fell 7.4% to US$1.12 billion, with volume down 23.7% to 162,200 tonnes.
A softer dollar abroad compounded the move. The BCP noted in August that the dollar index had weakened since its previous meeting.
The carry trade argument
Manuel Ferreira, a former finance minister, points to interest rates. He told Última Hora that guaraní rates in the banking market run between 10% and 14%.
Dollar rates, he said, sit nearer 5% or 6%. That gap gives investors a reason to sell dollars and hold guaraníes instead.
The BCP policy rate is 5.50%, held unanimously at the meeting of 25 August 2026. Market rates in local currency are close to double that level.
If the currency then strengthens, the trade pays twice over. Ferreira’s worked example turns US$1 million into about US$1.14 million rather than US$1.05 million.
That mechanism is one economist’s reading rather than an official finding. The BCP has not confirmed it as a driver of Paraguay’s appreciating guaraní.
Why the central bank has stayed out
Through August 2026 the BCP had neither bought nor sold dollars directly to the financial sector. Its net operations with the public sector came to US$328.4 million.
Holding those dollars rather than reselling them slowed the move. It did not stop it.
Net international reserves stood at US$11.45 billion on 21 August 2026. They had been US$11.70 billion at the end of July.
Inflation gives the bank little reason to act. Consumer prices rose 1.6% in the year to July 2026, and fell 0.1% in the month.
Core inflation was 1.3%. Both readings sit well below the 3.5% target the BCP has set, inside a two-point band.
Neighbours use pre-announced rules instead. Chile buys up to US$25 million a day under a published programme, and Peru had bought US$3.93 billion by mid-July.
Investment grade and the hunt for dollars
Two agencies now rate Paraguay investment grade. Moody’s moved the sovereign to Baa3 with a stable outlook on 26 July 2024.
S&P Global Ratings followed with a BBB- rating and a stable outlook on 17 December 2025. The BCP cites both when it explains the country’s appeal to long-term capital.
Direct investment figures lag by about ten months, so 2024 is the latest full year. It brought net inflows of US$931 million, a rise of 15% on 2023.
The stock of direct investment ended 2024 at US$10.4 billion, up 3.8%. Investors came from 68 countries, led by Brazil, the United States and the Netherlands.
A BCP study with the Latin American Reserve Fund (FLAR) was presented on 6 August 2026. It put cumulative net inflows near US$10 billion since 2008, helped by the two investment-grade ratings.
Grain exporters and industry want an answer
Hugo Pastore runs the Cámara Paraguaya de Exportadores y Comercializadores de Cereales y Oleaginosas (Capeco). He told ABC Color on 27 August that his sector has no predictability left.
He described the currency as a bottomless barrel that never settles. Machinery and freight costs are climbing in dollar terms as the soy planting season approaches.
Luis Tavella, who heads the Federación Paraguaya de Mipymes (Fedemipymes), put exporter losses near 25% over the year. He said the conversion from dollars into guaraníes is where the money disappears.
The Cámara de Industrias Sustentables del Paraguay (Cispy) went further. It said Paraguay’s appreciating guaraní is destroying competitiveness, cutting margins and putting investment and jobs at risk.
Cispy asked the BCP for real, concrete and urgent action. Property developers complained the next day that no central bank official had explained the situation.
Cattle producers lose the gain in translation
The Asociación Paraguaya de Productores y Exportadores de Carne (Appec) put numbers on the squeeze. Cattle prices rose 22% in dollars between January and August 2026.
In guaraníes the same prices rose 6%. Paraguay’s appreciating guaraní absorbed the sixteen-point difference before it reached the ranch gate.
Appec said a slower move would have left producers more of the international gain. Costs, it noted, matter as much as the headline price.
The trade data points the same way. Beef receipts fell 7.4% in the seven months to July, even as world prices improved.
Property prices are the exception
Gonzalo Faccas of the Cámara Paraguaya de Desarrolladores Inmobiliarios (Capadei) called this a very serious predictability problem. He said the guaraní has risen more than 23% while regional currencies gained about 10%.
Faccas said square-metre prices have moved from roughly US$1,500 to about US$2,000. Developers earn in dollars but pay four fifths of their costs in guaraníes.
Raúl Constantino, who chairs Capadei, said members now recalculate costs constantly. He argued that exchange-rate stability is a basic condition for committing to a project.
Faccas also pointed to an asymmetry. The BCP acted when the dollar climbed towards 8,000 guaraníes, he said, but has not acted on the way down.
Consumer prices tell a calmer story. At 1.6% a year, Paraguay’s appreciating guaraní has produced no general price alarm, whatever the property market reports.
Frequently Asked Questions
How strong is the guaraní right now?
The dollar traded at about 5,990 guaraníes on 28 August 2026. That is the strongest guaraní reading since late 2018.
Why is the guaraní rising?
Record soybean receipts, a large trade surplus and a softer dollar abroad. High local interest rates also draw money into guaraní deposits.
Who is hurt by the stronger currency?
Grain exporters, cattle producers, small manufacturers and property developers have all complained. Paraguay’s appreciating guaraní cuts their dollar earnings once converted into local currency.
Sources
- www.bcp.gov.py
- www.bcp.gov.py
- www.bcp.gov.py
- www.bcp.gov.py
- www.bcp.gov.py
- www.bcp.gov.py
- www.bcp.gov.py
- www.abc.com.py
- www.abc.com.py
- www.abc.com.py
- www.ultimahora.com
- www.ultimahora.com
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