Guatemala: Banguat stands pat for eleventh successive meeting in August
On 28 August, the Monetary Board of the Central Bank of Guatemala (Banguat) unanimously decided to keep the key policy rate at 5.00%, marking the eleventh consecutive hold since May 2023.
Banguat said that maintaining the policy rate at its current level would ensure that price pressures and inflation expectations remain within its 3.0–5.0% target range in 2024–2025; in July, inflation ticked up to 3.8% but remained below the midpoint of the target band. Moreover, the Bank noted that activity has continued to expand at a pace that is consistent with its GDP growth forecasts for 2024 and 2025, giving it scope to keep interest rates elevated.
In its communiqué, Banguat did not include explicit forward guidance but reiterated its commitment to anchor inflation and inflation expectations within the target range. Our panelists continue to expect the Bank to embark on a monetary policy easing cycle this year and see 25–150 basis points of reductions by end-2024.
The next monetary policy meeting is scheduled for 25 September.