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."

More on this topic

Increasing Efforts to Reduce Appreciation of the Quetzal

June 2018

At the beginning of 2018 Banco de Guatemala authorized intervention in the foreign exchange market for up to a maximum of $500 million, and by last Friday $349 million had already been purchased.

With the aim of curbing appreciation of the currency against the US dollar, at the beginning of the year the Monetary Board authorized intervention in the exchange market with the purchase of $500 million, and according to Banco de Guatemala, 70% was used in the first semester of the year.

Guatemala and the Exchange Rate Intervention

March 2018

So far this year the Banco de Guatemala has intervened in the foreign exchange market buying $282 million, less than the $320 million bought in the same period in 2017.

As announced by the Central Bank authorities at the beginning of the year, the institution continues to implement actions to reduce the downward trend registered in the price of the local currency with respect to the Dollar. In January 2010 the Quetzal was quoted at Q8.40 for each dollar, and in January 2018 this figure reached Q7.34.

Guatemala: Banguat Authorized to Sell More Dollars

October 2009

Banguat is now authorized to sell up to $32 million a day; previously, it could offer only 24.

The measure, approved by the Monetary Board (Junta Monetaria), intends to give Banguat, the Central Bank of Guatemala, greater flexibility to control the depreciation of the Quetzal versus the Dollar.

Pressure Against the Quetzal Continues

March 2009

The Banguat continued its intervention in the foreign exchange market by selling $34.9 million to stop the devaluation of the Quetzal.

Pressures against the quetzal could be a product of the decision taken in December by the Monetary Board and the Bank of Guatemala to loosen the rules of participation and the reduction in bank reserves which generated greater liquidity in the local currency that was channeled toward purchasing foreign currency, according to some analysts.

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