Interest Rate in Guatemala

Guatemala Interest Rate

Banguat keeps the policy rate unchanged in June

On 28 June, the Monetary Board of the Central Bank of Guatemala (Banguat) kept the key policy rate unchanged at 5.00%.

The decision to keep the rate unchanged was influenced by a decline in inflation and inflation expectations in recent months. Moreover, the Bank anticipates that inflation will reach the target range of 3.0–5.0% by the end of 2023, further reducing the pressure to hike.

In line with its previous statements, Banguat did not provide any forward guidance but emphasized its commitment to controlling inflation and inflation expectations. Our panelists expect that the policy rate will be lowered by the end of the year.

The next monetary policy meeting is scheduled for 30 August.

On the outlook, analysts from the EIU commented:

“We expect the Banco de Guatemala to hold the policy rate in the coming months at its current level of 5%, where it has been since April, as price pressures have eased very slowly. Once headline inflation is close to (or within) Banguat’s 3-5% inflation target range, the central bank will embark on a mild easing cycle in late 2023 or early 2024 […]. In any case, the low level of financial intermediation in the country limits the impact of interest-rate rises on the wider economy.”