The amendment represents a 50% increase over the limit established in December 2024 and, according to the reasons set out in the resolution, reflects structural developments in Paraguay’s foreign exchange market. Central Bank of Paraguay

Why does this change matter?

Paraguay has seen sustained growth in foreign currency purchases and sales in recent years. The BCP notes that average trading volumes in 2026 are twice the levels recorded a decade ago.

This growth, together with the country’s greater integration into international financial markets, highlights the need to review the prudential parameters applicable to financial institutions periodically.

The new limit gives banks and finance companies greater scope to manage their daily foreign currency positions within a framework of regulatory oversight.

Implications for financial institutions

In operational terms, the amendment may provide greater flexibility to meet clients’ foreign exchange needs, manage foreign currency flows and manage proprietary positions within the permitted limits.

However, the increase in the regulatory limit does not remove the need for sound foreign exchange risk management policies.

Institutions must continue to comply with other applicable prudential limits and their internal monitoring, control and reporting procedures.

A banking law perspective

This amendment illustrates an important aspect of financial regulation: prudential limits must strike a balance between mitigating risk and supporting the system’s operational capacity.

Regulation that fails to keep pace with market developments may impose restrictions that no longer adequately reflect economic conditions.

At the same time, greater regulatory flexibility calls for internal risk management mechanisms that ensure the additional scope is used responsibly.

Financial institutions should therefore review their treasury policies, foreign exchange risk manuals and internal control systems to ensure they are consistent with the new framework.