Honduras: Monetary Policy Rate Remains at 5.75%

Arguing that core inflation remains below total inflation, the BCH decided to maintain the Monetary Policy Rate at the same level.

Tuesday, May 14, 2019

From the BCH statement:

May 9th, 2019. In ordinary session No.164 held on May 6, 2019, the Open Market Operations Commission (COMA) of the Central Bank of Honduras (BCH) analyzed the current situation and prospects of the main macroeconomic and financial indicators, at the national and international levels.

Externally, in the May 2019 meeting, the Federal Reserve (FED) of the United States of America kept its reference rate in the range of 2.25%-2.50%, given the employment, inflation and economic growth perspectives. On the other hand, the international prices of WTI (West Texas Intermediate) oil remain around US$61.0 per barrel and of coffee at US$92.0 per 46 kg bag. Also, the most recent future prices of these products continue to indicate that they would be below the average price observed the previous year.

In the domestic environment, the Monthly Economic Activity Index (IMAE) in February 2019 shows less dynamism with respect to the same date of the previous year; however, the activities of: Financial Intermediation; Telecommunications; Commerce; Agriculture; Private Construction, as well as Hotels and Restaurants.

Up to April 2019, the balance of net international reserves was US$4,950.8 million, supported by the income of foreign currency coming from family remittances, allowing a coverage of 4.97 months of import of goods and services.

The total inflation was at 4.86% in April 2019, close to the upper limit of the established tolerance range (4.0% ± 1 percentage point), behavior mostly explained by the rise in electric energy tariffs and the increase in the international price of fuels. On the other hand, subjacent inflation showed an acceleration regarding the previous month, however, it remains below total inflation.

The inflation expectations of the economic agents of April 2019 and our inflation forecasts indicate that this would be within the tolerance range by December 2019.

In this context, when evaluating the economic situation and the risks balance, the BCH decided to keep the Monetary Policy Rate at 5.75%. However, it will rigorously monitor the evolution of inflation, with the commitment to take the necessary policy measures in order to comply with its primary objective, established in Article 2 of its Law.



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The decision to reduce the reference rate is based on the detailed analysis of the risk balance regarding the inflation forecasts, including international and domestic macroeconomic indicators, market expectations and medium term projections, informed the Central Bank.

Monetary Policy Rate Remains at 5%

April 2019

Arguing that the inflation forecast would be around the central value of the target range, in Costa Rica the Central Bank decided to maintain the Monetary Policy Rate at 5%.

The Central Bank defined its long term inflation goal (measured with the year-on-year variation of the Consumer Price Index) in 3%, with a tolerance of ±1 percentage point, the institution reported.

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%.

Honduras: Monetary Policy Rate Up to 5.75%

January 2019

Arguing that the medium-term forecasts indicate that the inflation trajectory will remain above the tolerance range, the BCH decided to raise the Monetary Policy Rate by 0.25%.

From the BCH press release:

January 4th, 2019. In ordinary session No.158-10-12/2018, the Open Market Operations Commission (COMA) of the Central Bank of Honduras (BCH), analyzed the recent evolution and perspectives for the main macroeconomic and financial indicators, at domestic and international levels.

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