Guatemala: Exports Less Competitive Due to Exchange Rate

Appreciation of the quetzal against the dollar has affected the income of exporters who are asking the monetary authority to stop overvaluation of the local currency.

Tuesday, March 25, 2014

The President of the Guatemalan Association of Exporters (Agexport) reported that the strength of the quetzal is causing products in the country to be more expensive and therefore a change in monetary policy is needed.

Castle Stuart, President of Agexport said: "We understand that the exchange rate recorded cyclical fluctuations during the year, appreciating earlier this year and experiencing depreciation in the second quarter, however, from January to March 2014 there has been an appreciation of the quetzal against the dollar above the level recorded in previous years, and this is of great concern to the productive sectors and exporters of the country whose competitive position is being severely punished because of overvaluation of the currency." said Castillo.

"Therefore, the President of the organization is urging the authorities to take the appropriate monetary, exchange and credit measures necessary to minimize the impact of fluctuations in the price of the dollar and continue with efforts to improve other aspects of competitiveness, such as tariffs and transport deficiency in ports."

More on this topic

Guatemala and the Exchange Rate Debate

February 2017

Although the export sector continues to denounce the loss of competitiveness because of appreciation of the quetzal against the dollar, the Central Bank insists that the exchange rate will remain dependent on market factors.

A  year ago the complaint was the same. Exporters asked the Central Bank for a review of the exchange scheme to induce a devaluation that would allow them to recover some of the competitiveness lost abroad because of the exchange rate. The situation today has not changed, and exporting companies have asked for the Ministry of Agriculture to intervene in this matter.

Guatemala: Quetzal Strengthens Against Dollar

July 2016

Strong growth of remittances and savings in the oil bill are two of the factors responsible for an increase in the supply of dollars which is putting downward pressure on its price against the quetzal.

Appreciation of the Guatemalan currency against the US currency is also due to lower demand for dollars in the local market, according to statements made by the president of the Bank of Guatemala to 

Guatemala: Quetzal Continues to Appreciate Against Dollar

January 2015

In order to moderate the decline in the dollar the Bank of Guatemala has made two interventions so far in 2015.

During 2013 the Guatemalan currency gained about 3% against the dollar, making exports less competitive. Due to the fact that the trend has continued, the Bank of Guatemala has started to apply the rule of exchange participation in order to moderate behavior of the currency.

Change in Exchange Rate Trend in Guatemala

October 2014

Since August the quetzal has been appreciating against the dollar, mainly due to an increase of foreign exchange coming into the country in the form of remittances.

Although in the first eight months of the year the exchange rate against the dollar was stable, from August the trend began to change and the national currency began to appreciate.

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