Policy Interest Rate in Guatemala
The Policy Interest Rate ended 2022 at 3.75%, up from the 1.75% end-2021 value and down from the reading of 5.00% a decade earlier. For reference, the average policy rate in Central America and Caribbean was 6.40% at end-2022. For more interest rate information, visit our dedicated page.
Guatemala Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for Guatemala from 2024 to 2023.
Source: Macrobond.
Guatemala Interest Rate Data
2019 | 2020 | 2021 | 2022 | 2023 | |
---|---|---|---|---|---|
Policy Interest Rate (%, eop) | 2.75 | 1.75 | 1.75 | 3.75 | 5.00 |
Central Bank eases monetary policy stance further in November
Central Bank opts for another quarter-point cut: At its last meeting of 2024 on 27 November, the Monetary Board of the Central Bank of Guatemala (Banguat) unanimously decided to cut the key policy rate by 25 basis points to 4.50%. The move mirrored September’s decision and marked the second consecutive cut in the current loosening cycle.
Below-target inflation drives further monetary policy loosening: November’s cut chiefly reflected softer price pressures, which dipped below the lower limit of the Bank’s 3.0–5.0% target range in September–October. Moreover, the Bank noted that risks to the inflation outlook for 2024–2025 remain balanced. Meanwhile, the U.S. Fed’s cut on 7 November likely added further impetus to the move to minimize exchange rate fluctuations. Lastly, Banguat noted that economic activity continued to expand at a pace consistent with its projections for 2024 and 2025, likely reducing the need for a larger-sized cut.
Further reductions in store for 2025: In its communiqué, Banguat did not include explicit forward guidance but reiterated its commitment to anchoring inflation within the target range. Our panelists have penciled in 125 basis points of further reductions in 2025 as inflation settles close to the midpoint of its target range. That said, commodity price spikes, softer monetary policy easing in the U.S. and lower-than-expected GDP growth are upside risks to the policy rate. The Bank will reconvene next year.
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Guatemalan interest rate projections for the next ten years from a panel of 4 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Guatemalan interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our Guatemalan interest rate projections.
Want to get access to the full dataset of Guatemalan interest rate forecasts? Send an email to info@focus-economics.com.
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