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Guatemala Monetary Policy April 2022

Guatemala: Central Bank keeps rate unchanged in April

The Monetary Board of the Central Bank of Guatemala (Banguat) stood pat at its 27 April meeting, keeping the monetary policy rate at 1.75%.

In deliberating its decision, the monetary policy authority noted that the economy continued to perform robustly, but that downside risks increased in recent weeks amid the fallout from the war in Ukraine. That said, the Bank expects inflation to remain within its 3.0–5.0% target range this year and next. This provided the Bank with room to stand pat.

The Bank reaffirmed its commitment to “continue closely monitoring the evolution of the main economic indicators […] that may affect the general level of prices and, therefore, inflation expectations” in the press release. However, the statement was devoid of forward guidance regarding the future direction of monetary policy. Our panelists expect the Bank to tighten financial conditions this year as inflationary forces intensify, the economy performs resiliently, and rate hikes among the major central banks further pressure Banguat to hike its monetary policy.

The next meeting is set for 25 May.

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