IMF calls on Paraguay to update financial regulations

The IMF has called on Paraguay to work on pending reforms to update financial sector legislation.

Even though the central bank has improved its inflation control and achieved greater exchange rate flexibility, the country should focus on developing an "active money market, and on further reinforcing risk-based bank supervision," said IMF's deputy managing director Naoyuki Shinohara after a visit to Paraguay.

Paraguay should also speed up implementation of its national action plan to prevent money laundering and terrorist financing (AML/CFT), according to the statement.

Overall, Shinohara considers Paraguay's outlook as positive. Low debt, sizable reserves, small fiscal and current account deficits, and inflation below target should help the country manage external shocks.