Guatemala Interest Rate

Central Bank keeps rates on hold in June

Banguat holds steady for a fourth straight meeting: On 24 June, the Bank of Guatemala (Banguat) kept its policy rate at 3.50%, the lowest since November 2022. The pause was the fourth in a row after the Bank cut rates by 100 basis points between August 2025 and February 2026.

Geopolitical risks warrant hold: Banguat refrained from cutting as the U.S.-Iran war has kept fuel prices elevated, threatening to sustain imported inflation if a lasting peace deal is not reached. Banguat also noted that economic activity indicators remain consistent with the Bank’s 2026 GDP growth projection of 3.1–5.1%. Meanwhile, the Bank viewed a hike as also unnecessary, as inflation in May fell below its 3.0–5.0% target range and Banguat’s forecasts still point to inflation settling within target in 2026–2027.

Policy rate to remain on hold through the end of the year: The Bank provided no guidance on the path of upcoming decisions. Most of our panelists now expect Banguat to keep rates unchanged through end-2026, though a minority still projects it to cut. Since the Bank is likely aiming to contain the interest rate gap with the U.S., it may delay any further easing until the Federal Reserve has first lowered rates. Banguat is scheduled to meet again on 26 August.

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