Paraguay’s September Treasury auction drew almost four times the amount ultimately placed, while yields on the 2030 and 2035 bonds fell again. The result adds to a broader 2026 trend: deeper demand for guaraní-denominated sovereign debt, longer maturities and a gradual reduction in the State’s exposure to foreign-currency borrowing.

3 October 2026

Paraguay’s domestic bond market delivered another strong signal in September. The Ministry of Economy and Finance (MEF) received total demand of PYG 906 billion in its fourth Treasury bond auction of 2026, while awarding PYG 230.5 billion. Demand was therefore about 3.9 times the amount placed, according to the Ministry. The transaction was carried out through the Asunción Stock Exchange and reopened two existing Treasury series maturing in 2030 and 2035.

Yields move lower across the curve

The 2030 bond was awarded at a yield of 8.26%, while the 2035 bond cleared at 8.70%. Both levels were below those recorded in the July auction: the 2030 yield fell by 24 basis points and the 2035 yield by 30 basis points. The direction is also clear when compared with June, when equivalent maturities were placed at 8.60% and 9.10%, respectively.

For the Treasury, lower yields reduce the cost of funding in domestic currency. For the market, the more important point is the combination of falling yields and strong excess demand. A sovereign yield curve with recurring auctions provides a reference price for banks, pension investors, corporate issuers and other fixed-income instruments. Paraguay’s local capital market remains small by regional standards, but repeated Treasury issuance is gradually creating a broader set of benchmark maturities.

Local-currency borrowing is becoming more important

The September auction forms part of a deliberate strategy to increase the share of public debt denominated in guaraníes. That strategy has also been taken to international markets. In February 2026, Paraguay issued PYG 6.507 trillion of global bonds – approximately USD 1 billion at the transaction exchange rate – with a 12-year maturity and an 8.5% coupon. The deal attracted 64 international investors and demand equivalent to around 1.5 times the amount offered.

The same transaction included a USD 300 million reopening of Paraguay’s 2055 dollar bond, for which demand reached USD 1.89 billion. The two tranches illustrate the country’s dual funding approach: maintaining access to long-dated US-dollar debt while developing a larger investor base for guaraní-denominated instruments.