Paraguay president-elect names next central bank governor

The president-elect of Paraguay, Santiago Peña, said he would nominate a central bank veteran as the next governor upon taking office later this month.

Peña told Radio Ñandutí he would name Carlos Dagoberto Carvallo Spalding to lead the Central Bank of Paraguay (BCP) and announced Carvallo’s appointment on social media the same day, July 31.

Carvallo served on the BCP board of directors between 2015 and 2020. He is currently president of the Ueno financial company.

Between 2000 and 2015, he worked for different multilateral organisations, including the Inter-American Development Bank, the Latin American Integration Organisation and Mercosur. He also worked as head of economic research in the Paraguayan finance ministry between 1999 and 2000.

The governor-designate holds a PhD in economics from the Catholic University of Argentina and a master’s degree in macroeconomics from the Catholic University of Chile.

The BCP governor serves a five-year term that coincides with that of the president. The president nominates the governor, whose appointment must be confirmed by the senate. The governor presides over the board of directors.

Peña is also an economist, and worked for the central bank between 2000 and 2009. After a stint at the International Monetary Fund, he served on the central bank board between 2012 and the start of 2015, and later as finance minister between 2015 and 2017.

The current governor, José Cantero Sienra has been in office since 2018. He led the central bank during the pandemic, and then through a tightening cycle between August 2021 and September 2022.

In that period, the central bank ordered 14 rate increases, raising the policy rate from 0.75% to 8.5%. Since September, the BCP has held the policy rate steady for nearly a year. Inflation was 4.2% in June, close to the target.

Peña also plans to appoint Carlos Fernández Valdovinos, BCP governor between 2013 and 2018, as finance minister. 

Fernández told Bloomberg the incoming government would not undermine the central bank’s independence or its inflation target. ”That is going to be fundamental so that the public’s pocketbook doesn’t continue deteriorating because of price increases,” Fernández said.

He has previously criticised two appointments to the BCP’s board of directors. He said the two nominees, Carmen Marín and Humberto Colmán, had professional ties to the finance ministry that could compromise the central bank’s autonomy.

In December, Fernández accused the government of trying to legislate for illegal interest-free loans from the central bank.