Guatemala: Leading Rate Begins 2020 at 2.75%

Arguing that the main economic indicators show a stable behavior, the Central Bank decided at the beginning of the year to maintain the level of the leading interest rate of the monetary policy at 2.75%.

Friday, February 21, 2020

From the Bank of Guatemala's statement:

February 20th, 2020. The Monetary Board, in its session celebrated on February 19, based on the integral analysis of the external and internal economic situation, after evaluating the Inflation Risks Balance, decided to keep the level of the leading interest rate of the monetary policy at 2.75%.

The Monetary Board, in the external environment, considered that the projections of economic growth at world level suggest that the performance of the economic activity would be greater than in 2019, in 2020 as well as in 2021, although in an environment in which there are downward risks and wide margins of uncertainty.

In addition, it took into account that the forecasts, in the base scenario, of the average international price of oil for the current year, and for the next, show a moderate upward trend.

The Monetary Board, domestically, highlighted that several short term indicators of the economic activity as the Monthly Index of Economic Activity (IMAE), the Economic Activity Trust Index (ICAE), the monetary aggregates and family remittances, show a congruent dynamism with the annual economic growth forecast for the current year (between 3.1% and 4.1%).

Additionally, the Monetary Board pointed out that, based on the forecasts and on the inflation expectations for 2020 and for 2021, the inflation would remain within the tolerance margin of the established target (4.0% +/- 1 percentage point). The Monetary Board reaffirms its commitment to continue giving close follow up to the evolution of the main economic indicators, foreign as well as domestic, that could affect the general level of prices and, therefore, the inflation expectations.



More on this topic

Guatemala: Leading Rate Remains at 2.75%

November 2019

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: Leading Rate Remains at 2.75%

September 2019

Arguing that the economic activity reports a behavior attached to the forecasts of growth for 2019, the Central Bank decided to maintain in 2.75% the level of the leading interest rate of monetary policy.

The inflation forecasts for 2019 and 2020 are located within the tolerance margin of the goal established by the Monetary Board, was another of the arguments of the monetary authority to keep the reference rate without variations.

Macroeconomic Stability and the Leading Rate

June 2019

For the third time, in this year, the Banco de Guatemala confirmed that it decided to keep the monetary policy rate at 2.75%, since the short term indicators of the economic activity show a dynamism that adjusts to the expected.

From the Banco de Guatemala press release:

Leading Rate Remains at 2.75%

April 2019

For the Banco de Guatemala the behavior of several short term indicators follows the prognosis, the institution decided to keep the monetary policy rate without changes.

From the Banco de Guatemala press release:

Guatemala, April 25, 2019. The Monetary Board, in its session held on April 24, based on the integral analysis of the external and internal economic situation, after evaluating the Inflation Risks Balance, decided to keep the level of the leading interest rate of the monetary policy at 2.75%.

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