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The leading monetary policy interest rate in Guatemala remains at 1.75%

The Monetary Board of Guatemala held a session on April 27th to evaluate the Inflation Risks Balance, and after an analysis of the internal and external economic situation, approved by majority to maintain the leading interest rate of the monetary policy at 1.75%.

The Monetary Board noted that “the recovery in global economic activity has been sustained despite high margins of uncertainty; however, the outlook for global economic growth suggests that the recovery could be slower than expected, given that risks are skewed to the downside, mainly due to the Russia-Ukraine conflict and high levels of international inflation, to the normalization of the monetary policy of the main central banks and to the evolution of the pandemic, highlighting the confinements established in some of the main Chinese cities. Likewise, I take into account that the international price of oil remains at high levels, so that the available projection anticipates that, in the base scenario, the average price of crude oil during the current year would be higher than that observed in 20212”.

In addition, it was emphasized that certain indicators such as the Monthly Index of Economic Activity, remittances, foreign trade and private sector bank credit have shown that economic activity has maintained its momentum; not to mention the inflation forecasts for the years 2022 and 2023, which continue to be within the target.

During the coming months, the Monetary Board has reiterated its commitment to closely monitor all those events and indicators that mark the evolution of internal and external economic indicators, which may affect the general level of prices and, consequently, the country’s inflation, since these factors have a direct impact on the economy of any country.

Maria-fernanda-villagran-canoMaría Fernanda Villagran
García & Bodán