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Guatemala Monetary Policy April 2024

Guatemala: Banguat holds rates stable once again in April

On 24 April, the Monetary Board of the Central Bank of Guatemala (Banguat) unanimously decided to keep the key policy rate at 5.00%, marking the eighth consecutive hold since May 2023.

The Bank opted to maintain its key policy rate unchanged for three main reasons. Firstly, inflation has continued to decline, inching closer to the floor of the Bank’s target range of 3.0–5.0% in March. Secondly, the authority’s most recent forecasts for both inflation and inflation expectations in 2024–2025 remained within target; the Bank attributed the current disinflationary trend to a still-tight monetary policy backdrop as well as receding imported price pressures. Thirdly, Banguat noted that short-term indicators through the three months to March aligned with its growth forecast of 3.5% and 3.6% for 2024 and 2025, respectively.

In its communiqué, Banguat did not include explicit forward guidance. That said, the Bank once again highlighted its commitment to anchor inflation within its target range. Our panelists expect Banguat to embark on an easing cycle this year and have penciled in between 25–150 basis points of cuts by year-end.

The next monetary policy meeting is scheduled for 29 May.

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