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Guatemala Monetary Policy November 2019

Guatemala: Banguat stands pat in November

At its 27 November meeting, the Monetary Board of the Bank of Guatemala (Banguat) held its fire and kept the key interest rate unchanged at 2.75%, where it has now been for two years.

The decision to stand pat was driven by well-anchored inflation expectations; inflation, however, fell outside the Bank’s target range for the second consecutive month in October amid low global oil prices. Moreover, economic data points to robust GDP growth in the third quarter, as the index of economic activity continued showing robust growth through September. On the external front, the Bank noted that the outlook remains positive despite downside risks and even though momentum in the global economy is moderating.

In the accompanying press communiqué, the Bank struck a similar note compared to its previous meeting. It reaffirmed its commitment to closely monitoring key economic indicators and the effects on prices and thus inflation. Going forward, some panelists expect the Bank to tighten credit conditions next year amid robust economic growth and on-target inflation.

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