Banguat Leading Rate Rises to 5%
Thursday, July 28, 2011
The Bank of Guatemala has increased the monetary policy leading interest rate from 4.75% to 5.00% taking effect from 28 July.
In its analysis, the Monetary Board took into consideration that the global economy is continuing to expand, albeit at a slower pace than expected. However, according to the International Monetary Fund, this moderation in growth is temporary and forecasts still point to global growth being located above the historical average. It also found that international prices of raw materials (oil, corn and wheat) in recent weeks again showed an increasing trend and are staying at levels high compared to the previous year

Regarding the domestic front, the Monetary Board took into account that inflation continued to rise in June, due in part to price increases of raw materials, the forecasts and inflation expectations remain high, although these show certain moderation for 2012; the IMAE continues to record positive rates and international trade also remains dynamic, public finances showed an improvement and, although it is expected that the fiscal deficit for 2011 will be less than anticipated earlier this year, it remains higher than the values reported before the global crisis.

In this context, having analysis of the expected behavior of the main variables of the national economy and, in particular, expected inflation in the medium and long term, the Monetary Board considered it necessary to adjust the monetary policy interest rate In order to counteract the effects of runoff in the evolution of inflation and bring down inflationary expectations and thus initiate a path of convergence towards the goal of medium-term inflation.

The Monetary Board said it will continue to monitor the behavior of the forecasts and inflation expectations and the main economic indicators, both internal and external, in particular those which still show a lot of uncertainty, in order to take appropriate action to avoid the path of inflation away from its medium-term target.
Source: Bank of Guatemala
Source: Bank of Guatemala
More on this topic
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Arguing that the economic activity and the execution of public expenditure report a behavior attached to the growth forecasts for 2019, the Central Bank decided to maintain again at 2.75% the level of the leading interest rate of the monetary policy.
From the Banco de Guatemala statement:
Guatemala: Economic Outlook for March 2017
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The Bank of Guatemala has kept the lead monetary policy rate at 3%, arguing that high levels of uncertainty still persist in the external economic environment.
From the report "Recent macroeconomic performance and prospects," by the Bank of Guatemala :
Guatemala: Leader Rate Stays at 4.75%
May 2014
The Bank of Guatemala is keeping at the same level its leading policy rate, which is the main reference for interest rates in the country.
From a statement issued by the Bank of Guatemala:
Guatemala Central Bank Maintains Interest Rate at 4.75%
July 2011
The Monetary Board has unanimously decided to not to change the monetary policy’s prime lending interest rate, keeping it at 4.75%, based on a comprehensive analysis of the internal and external situation.
In making this decision the Monetary Board took into account the following:
Key entities
Bank of Guatemala Monetary Board of Guatemala
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Bank of Guatemala
Interest rate
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