Paraguay Reacts To Economic Turmoil In Next Door Argentina

Paraguay is largely insulated from Argentina's growing economic woes.

Following Argentina’s vote on Sunday August 11, where opposition candidate Alberto Fernandez—whose running mate is former president Cristina Fernandez de Kirchner—dominated the primary vote and spooked financial markets, Paraguay’s central bank President Jose Cantero Sienra wanted to stress how the two countries are different and set apart:

“We are facing an impact from our neighbors in Argentina, whose economy has been slowing down since last year. They gave an important win to the Fernandez in the primary elections” on August 11.

“Facing all the potential the changes that may happen in Argentina, we have a very solid country. In addition, the links between Paraguay and Argentina are few and relatively weak. There is no Argentine capital in our banking system, nor banking deposits from Argentina. Our exports toward Argentina are 15% of the total and mainly grains and as such unlikely to fluctuate.

“Our economy can endure the ups and downs happening in Argentina and we still are ready to navigate this new situation.

“We never fixedprices, we never had hyperinflation and our currency has never been changed in its value since it was set 75 years ago. Paraguay is a platform that offers a lot of stability at low cost. For both investors at home and abroad we offer a platform that is simple, cheap and very predictable.”

A full interview with President Sierra will appear in the October 2019 issue of Global Finance magazine.