(Bloomberg) -- Paraguay’s central bank accelerated the pace of monetary easing at its monthly policy meeting Wednesday, delivering a surprise half-percentage point cut to drop the benchmark interest rate to 7.25%.

Analysts surveyed by the central bank expected a quarter-point reduction. Policymakers have lowered the key rate by 125 basis points since August amid a steady slowdown in consumer price increases. Annual inflation remained below the central bank’s 4% target for a fourth consecutive month at 3.5% in October.

Policymakers will monitor the impact of domestic and international factors on inflation going forward, the central bank said in a statement following its decision.

Paraguay and its inflation-targeting South American peers, including Chile, Brazil and Peru, are currently loosening monetary policy. Uruguay’s central bank, which has dialed back the pace of interest rate cuts, said last week that it is approaching the end of its current easing cycle.

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