Brazil & Southern Cone - November 2011 (ISSN 1741-4431)

The rise in the dollar against all South American currencies in the past couple of months is likely to lead to higher inflation in Paraguay. In the past month, the Guaraní has fallen by 8% against the dollar. This has pushed up the price of fuel, all of which Paraguay imports, and such a rise will push up prices right across the economy. Petropar, the state oil company, which handles most imports, said that it will wait until the end of November before deciding what to do about diesel prices. Internationally diesel prices have risen more than petrol prices. This is because demand for diesel invariably rises in the Northern Hemisphere winter. Petropar reports that diesel prices have risen by about US$10 a barrel in the past four weeks. Petropar is selling diesel at G$5,125 a litre (about US$1.24 a litre) but other companies cannot make a profit importing and selling at that price.

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