Economy, Currency and Foreign Trade

The basic unit of national currency is the guarani (3,486 guaranis equal U.S.$1; 2000 average). The Central Bank of Paraguay (1952) issues currency and controls exchange.

In 2000 Paraguay’s imports cost $3.1 billion, and its exports earned $1.1 billion. Major imports were petroleum, machinery, transportation equipment, metal and metal products, and foodstuffs; leading exports were cotton, soybeans, timber, oilseeds, and meat. The chief purchasers of Paraguay’s exports are Brazil, The Netherlands, Argentina, the United States, Uruguay, and Chile; leading sources of imports are Brazil, Argentina, the United States, Japan, South Korea, and Hong Kong. Paraguay is a member of two trade associations, the Latin American Integration Association (LAIA) and the Southern Cone Common Market (known by its Spanish acronym MERCOSUR). The LAIA, created in 1980 to replace the Latin American Free Trade Association (LAFTA), works to integrate the economies of member countries, which include most South American countries as well as Mexico. MERCOSUR, a free trade association created in 1995, lowers tariffs between Paraguay, Argentina, Uruguay, and Brazil.