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Guatemala Monetary Policy May 2023

Guatemala: Banguat keeps the policy rate unchanged in May

On 31 May, the Monetary Board of the Central Bank of Guatemala (Banguat) kept the key policy rate unchanged at 5.00%, following a 325 basis point cumulative increase since April 2022.

The decision to pause the tightening cycle was driven by inflation and inflation expectations having dipped in recent months, and the Bank’s expectation that inflation will converge to the upper bound of its 3.0–5.0% target range in 2023. The Bank noted that external factors driving up price pressures diminished in the last few months.

In line with its past communiqués, the Bank refrained from offering any indications about forward guidance, reiterating its commitment to curbing inflation and stabilizing expectations. The Consensus is for a lower policy rate by the end of the year.

The next monetary policy meeting is scheduled for 28 June.

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