Uncertainty Affects Exchange Rate

Although Guatemala and the U.S. have already signed an agreement on migration issues, the exchange rate reported a slight increase and the upward trend is expected to continue over the next few days.

Monday, July 29, 2019

President Trump's warning to Guatemala to impose export tariffs and taxes on remittances and transfers had a direct impact on the exchange market.

Data from the Banco de Guatemala indicate that between July 23 and 29 the price of the Quetzal with respect to the US dollar increased from Q7.64 to Q7.68, which according to the authorities is explained by the uncertainty generated by the possible sanctions against the country.

You may be interested in "Uncertainty Increases over Relationship with the U.S.

Sergio Recinos, president of the Bank of Guatemala, explained to Prensalibre.com that "... in the economic measures announced, the technical bodies analyzed that there could be an impact on the balance of payments and on the exchange rate that this slight "upward leap" manifested."

Also see "Concern about the Future of the Relationship with USA

The article adds that "... The movement of the four cents is due to this factor, i.e. it is based on the perceptions of economic agents. Although the adjustment is slight, uncertainty persists."

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More on this topic

Guatemala: Exchange Rate Up to Q7.75

March 2020

Between March 23 and 24 the price of the Quetzal vs. Dollar rose from Q7.67 to Q7.75, which is attributed to the expectations of a possible economic slowdown, due to the impact of the Covid-19 crisis.

The expectations of a decrease in the income of family remittances, the time that the international economy could be depressed and the component of fear in the agents, are other causes of the upward pressure that the exchange rate has reported in the last hours.

Quetzal vs. Dollars: Has the Trend Reversed?

September 2018

Since the beginning of the year Banco de Guatemala has intervened in the foreign exchange market buying foreign currency in order to curb appreciation of the local currency against the dollar, but in recent weeks it has been selling currencies in order to minimize depreciation.

In recent weeks the exchange rate of the Quetzal against the US dollar has been trending upwards, which has forced the Bank of Guatemala (Banguat) to sell foreign currency in the foreign exchange market. So far this year, up until September 24, it has had to intervene selling $402 million worth of foreign currency.

Uncertainty Over Dollar in Costa Rica

June 2014

A proliferation of articles, reviews and editorials on the exchange rate is the best example of the prevailing concern in a market waiting for a clear definition of the exchange rate policy by the Central Bank.

Editorial

In recent weeks, and while the President of the Central Bank of Costa Rica (BCCR) is denying it , warnings have been given over interventions in the foreign exchange market by the monetary authority.

Dollar Keeps Rising in Costa Rica

March 2014

The exchange rate in the wholesale market reached 558 colones per dollar, while at bank counters one dollar was being sold (on Wednesday March 5th) at 565 colones.

The price of the dollar in Costa Rica has not found an upper limit, trading at 565 colones per dollar at some bank counters, which is sixty colons more than earlier this year.

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