Paraguay: Selected Issues

August 1, 2012

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Format: Chicago

Paraguay: Selected Issues, (USA: International Monetary Fund, 2012) accessed November 21, 2024

Also available in: español

Summary

This Selected Issues paper for Paraguay discusses how capital inflows contributed to credit expansions. Capital inflows contribute to a rapid expansion of private credit, exacerbating credit and business cycles. These effects are stronger under more rigid exchange rate arrangements and in economies that are more closed to trade. Macroeconomic evidence for Paraguay suggests that local firms might have experienced a relaxation of credit constraints during the high capital inflows phase. Evidence also shows that consumption, investment, and output has grown above trend alongside a strong credit growth.

Subject: Balance of payments, Bank credit, Capital flows, Capital inflows, Exchange rate arrangements, Exchange rate flexibility, Financial institutions, Foreign banks, Foreign exchange

Keywords: Capital flows, Capital inflows, Capital inflows boom, CR, Exchange rate arrangements, Exchange rate flexibility, Foreign banks, Global, ISCR, Ki boom, Paraguay economy, Private sector, World food commodity price index

Publication Details

Pages:

29
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2012/212
Stock No:

1PRYEA2012002
ISBN:

9781475506808
ISSN:

1934-7685

Notes

Also Available in Spanish

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