VIII.  Trade and Project Financing

Banking System

The charter of the Central Bank of Paraguay and the Law of Banks
provide the framework for the establishment and operations of banks
and other financial institutions.  The central bank is responsible for
administering, managing and directing monetary policy.  The bank is
charged with protecting monetary stability to encourage economic
growth with low inflation.  The bank superintendency, a division of the
central bank, is charged with the supervision of banks and other finance
companies.  Paraguay has 31 commercial banks, 50 finance companies,
and 30 foreign exchange houses.  There are 13 foreign private banks, 15
private national banks, and two state banks.  Citibank is the only U.S.
bank present in Paraguay.

Foreign Exchange Controls Affecting Trading

Currently Paraguay does not have foreign exchange controls.  Importers
and exporters can buy and sell foreign exchange freely at commercial
banks, finance companies or exchange houses in Paraguay at the going
market rate.

General Financing Availability

In general, financing, including both import and export financing, is
extremely limited.  Local banks provide revolving credit for up to 360
days which may be renewable.  Relatively high nominal and real interest
rates due to mild inflation present a major obstacle to the availability of
medium and long term credit.

How to Finance Exports/Method of Payment

The Paraguayan government does not have an institution to provide
financing for exporters.  Local banks offer credit for up to 180 day
periods which may be renewable to both importers and exporters.
Moreover, Paraguay does not have monetary instruments to raise funds
that would allow lenders to provide medium and long term credit to
borrowers.

Types of Available Export Financing and Insurance

Local commercial banks provide Paraguayan exporters direct financing,
pre-financing of exports backed by a letter of credit opened by the
foreign buyer, and discounting of a letter of credit upon shipment of the
merchandise.  Eximbank provides financing for U.S. exporters selling
goods to Paraguay.  Eximbank financing could be obtained through
Citibank, the only U.S. bank present in Paraguay.  Local insurance
companies offer insurance to importers and exporters.

Project Financing Available

The World Bank and the InterAmerican Development Bank provide
project financing.  Paraguay would have access to approximately USD
one billion from these institutions through the end of 1998.

Banks with Correspondent U.S. Banking Arrangements

Nearly all Paraguayan banks have correspondent banking arrangements
with U.S. banks, primarily in New York and Miami, FL.  There are 31
commercial banks operating in the country, the most important are:
Citibank, Banco Nacional de Trabajadores, Banco de Asuncion, Banco
Union, Lloyd's Bank, Banco Sudameris Paraguay, Bancopar, Banco Aleman
Paraguayo, and Banco General.