COUNTRY PROFILE
Total land area:............... 397,300 sq. km.
Official language:............. Spanish
Administrative divisions:... 18 departments
Legal system:................... Based upon Spanish code law;
does not accept compulsory ICJ
jurisdiction
Executive branch:............. The president is the chief of
state and head of government.
Legislative branch:............. Bicameral Congress consists of the
Chamber of Senators
(845 seats; members elected by popular vote to serve five-year
terms) and the Chamber of Deputies (80 seats; members elected
by popular vote to serve five-year terms).
Judicial branch:................. Supreme Court of Justice. Judges
appointed on the
recommendation of the Council of Magistrates.
ECONOMIC PROFILE
Currency: Guaraní (Gs)
GDP: US$7.6 billion (1997)
Real GDP growth (at market prices): 2.6 (1997p)
GDP (average annual growth rate): 3.5 8 (1988-1997)
GDP per capita (1990 US$): 1,502.1 (1997)
Consumer price index (average annual growth rate): 6.9% (1997)
Central government fiscal balance (% of current GDP): 0.2 (1997)
Money supply (M1) (% of GDP): 7.9 (1997)
Interest rate (short-term nominal deposit rate): 9.7 (1997p)
Current account balance: -US$0.6694 billion
Trade balance: -US$1.39 billion
Main exports: Oilseeds, cotton, wood, hides, meat.
Main imports: Machinery, food, drink, tobacco, transport equipment,
electrical
apparatus, petroleum, chemicals, metals, textiles, paper, agricultural
implements.
Nominal exchange rate (Gs/US$) end of period: 2,580 (1997)
Real effective exchange rate (Index 1990=100): 83.9 (1997)
BANKING SYSTEM
Total number of banks in the system: 23
Types of banks: 20 commercial, 3 investment and development banks
Total amount of assets: Gs 5,808.305 billion, or US$2.25 billion (December
1997)
Total amount of deposits: Gs 4,895.916 billion, or US$1.89 billion
(December 1997)
Total amount of capital or net worth: Gs 875.423 billion, or US$0.339
billion (December 1997)
BANKING INSTITUTIONS
I. Banking Supervision
1. The Superintendencia
de Bancos is responsible for supervising banking entities.
2. It is an autonomous
entity.
3. The Superintendencia
reports to the Central Bank of Paraguay (Banco Central
de Paraguay).
4. The Superintendencia
examines banks once a year.
5. There are no categories
of ³safety and soundness² such as in the United States.
6. Banks are examined
using a system denominated CAULA, for Capital, Activos
(Assets), Utilidad (Earnings), Liquidez (Liquidity) and Administración
(Administration).
II. Consolidated Supervision
1. Paraguay does not
perform consolidated supervision.
2. Prior consent from
the Paraguayan authorities is needed to open or close a banking
entity abroad.
3. Prior consent from
a foreign bank¹s home country is not needed to open or close an
office in Paraguay.
4. Paraguay does not
request information about banking entities in other countries.
III. Interest Rates
1. Interest rates
on loans are determined by the market; however, a bank's
maximum rates cannot exceed 50% of the market average.
2. Interest rates
on deposits are determined by the market; however, a bank's
maximum rates cannot exceed 50% of the market average.
IV. Deposit Insurance
1. The Central Bank
guarantees deposits up to 50 times the monthly minimum wage
per depositor.
2. This guarantee
covers each depositor per account.
V. Trade Finance
1. Paraguay does not
officially define trade finance.
2. Banks bear the
risk of trade finance vehicles. However, in cases of intervention,
the government may bear the risk of import financing, letters of credit,
acceptances
and drafts.
3. Paraguay does not
differentiate trade finance from other operations.
4. In cases of liquidation,
the banking system makes specific provisions for
the treatment of trade finance.
VI. Capital Adequacy
1. The minimum capital
required to open a banking institution is 10.8 billion guaraníes
or US$3.8 million.
2. The minimum capital
required to maintain a bank operating is 10.8 billion guaraníes
or US$3.8 million.
3. Capital adequacy
is measured as follows:
Categories
Percentage of risk weighted assets and contingents
1
>=10
2
9
3
8
4
<8_______________________________
VII. Asset Quality
1. Loan portfolios
are classified as follows:
Loan Classification
% of Reserves
1 Normal risk
0%
2 Potential
risk
1%
3 Real risk
20%
4 High risk
50%
5 Irrecoverable
100%
2. The minimum reserve
requirement on bank assets is 100% of capital and should
be maintained by transferring at least 20% of the bank¹s annual profits.
3. The legal lending
limit is 20% of net worth with or without collateral.
4. Investment portfolios
are not classified according to criteria such as hold-to-maturity
portfolio, available-for-sale portfolio or trade portfolio.
5. Investment categories
are as follows:
Investment
Category Valuation Method
How Often Valued
Financial
market value
quarterly
Correspondent
Standard and Poors quarterly
6. The valuation of the investment portfolio affects the profit and loss statement.
VIII. Liabilities
1. Minimum reserve
requirements for demand deposits are 15% for deposits in local
currency and 27% for deposits in foreign currency.
2. Demand deposits,
checking deposits and time deposits can be offered in both local
and foreign currencies.
3. The limit on deposits
is 10 times the effective net worth.
4. There is no limit
on the level of concentration for certain types of deposits.