Banguat Defends Quetzal with $19.2 Million

The Bank of Guatemala (Banguat) intervened in the foreign exchange market to halt the devaluation of the Quetzal.

Wednesday, March 18, 2009

The bank placed $19.2 million at an exchange rate of Q8.08 and Q8.10; this being the first time it has intervened in the market since December 29, 2008, when it auctioned $3.5 million.

In an article in elPeriódico of Guatemala, it was reported: "For some analysts, the devaluation of the quetzal against the dollar has been driven indirectly by the Monetary Board and the Bank of Guatemala, after it decided to make the rule for participation more flexible when the average exchange rate of the previous 5 days varied from 0.5% to 0.75%, as well as having loosened the bank's financial reserve requirements which generated greater liquidity availability and this was channeled towards the purchase of foreign currency."

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