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Guatemala Monetary Policy February 2024

Guatemala: Banguat holds key policy rate at 5.00% in February

On 21 February, the Monetary Board of the Central Bank of Guatemala (Banguat) unanimously decided to keep the key policy rate at 5.00%, marking the sixth consecutive hold.

At the outset of 2024, price pressures cooled further: Inflation decreased to an almost two-year low of 3.8% in January, inching closer to the mid-point of the Bank’s target range of 3.0–5.0%. Against this backdrop, Banguat decided to maintain its currently restrictive monetary policy stance, which it assessed will anchor inflation expectations for 2024 within the target range.

Regarding activity, the Bank forecasts the economy will grow between 2.5–4.5% this year.

In its communiqué, Banguat did not include explicit forward guidance. That said, the Bank underlined that it stands ready to take further action as necessary to anchor inflation within the target range. Given the current disinflationary environment, our Consensus is for the Bank to embark on an easing cycle, with 100 basis points of cuts by end-2024.

The next monetary policy meeting is scheduled for 20 March 2024.

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