## Paraguay: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for Paraguay

_IMF Staff Country Reports, April 22, 2020_

## Source details

**Canonical URL:** [Paraguay: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for Paraguay](https://www.imf.org/en/publications/cr/issues/2020/04/22/paraguay-request-for-purchase-under-the-rapid-financing-instrument-press-release-staff-49359)

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## Bibliographic details
- Published: April 22, 2020
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513541815.002

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### Request and context
- Presents Paraguay’s Request for Purchase Under the Rapid Financing Instrument (RFI).
- In March 2020, Paraguay was hit by the Covid-19 epidemic, which has created fiscal and balance of payments needs.
- The authorities are requesting financial assistance under the IMF’s RFI to address the urgent balance of payments needs associated with the Covid-19 epidemic.
- Given the urgency of their request, there is no time to put in place a full-fledged upper credit tranche program.

### Assessment of authorities' response and constraints
- The authorities’ policy response to the epidemic has been timely.
- Limited access to financing and a weakened fiscal position constrain the ability to pursue a deeper emergency response.
- The authorities are of the view that they can make suitable adjustments to manage their medium-term balance of payments challenges.

### Policy recommendations and macroeconomic framework
- Return to the deficit ceiling under the Fiscal Responsibility Law in order to prevent the emergence of permanently high deficits after the crisis.
- Allow the exchange rate to continue to function as a shock absorber.
- Monetary policy should focus on inflation targeting.

### Key themes and subject areas
- Banking
- COVID-19
- Credit
- Exchange rates
- External debt
- Foreign exchange
- Health
- Money
- Public debt
- Revenue administration

*International Monetary Fund. Paraguay: Request for Purchase Under the Rapid Financing Instrument-Press Release; Staff Report; and Statement by the Executive Director for Paraguay (April 22, 2020).*

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_Source: https://www.imf.org/en/publications/cr/issues/2020/04/22/paraguay-request-for-purchase-under-the-rapid-financing-instrument-press-release-staff-49359_