Paraguayan producers demand BCP action amid falling US dollar

Paraguayan producers are calling for intervention from the Central Bank of Paraguay (BCP) following a sustained decline in the value of the US dollar against the guaraní. Industry groups, including the Paraguayan Association of Meat Producers and Exporters (APPEC) and the Union of Production Guilds (UGP), warn that the currency appreciation is eroding profit margins and international competitiveness.

The issue stems from a mismatch between revenue and costs: while exports are settled in dollars, significant operational expenses—such as wages, inputs, and maintenance—are paid in local currency. Producers argue that they cannot absorb these losses alone, which may lead to postponed investments and reduced productive capacity.

To stabilize the exchange rate, the UGP has proposed that the BCP purchase foreign currency to inject liquidity into the system. They suggest this could also help lower interest rates on savings certificates and commercial credit. Mario Balmelli, president of the Meat Commission of the Rural Association of Paraguay (ARP), noted that despite firm international cattle prices, the depreciation of the dollar means livestock is worth less in guaraní terms than in previous periods.