The Monetary Board decides to keep the reference rate at 5%

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The Leading Monetary Policy Interest rate has remained at the same level since April 2023.

The Monetary Board decided to maintain the Leading Monetary Policy Interest rate at 5% tonight. (Free Press Photo: Courtesy Banguat)

In the second session of the year scheduled by the Monetary Board (JM) for the discussion of the Leading Monetary Policy Interest rate, it was unanimously maintained at 5%, and the authorities offered an explanation, especially regarding the balance of risks involved in maintaining the indicator.

Álvaro González Ricci and José Alfredo Blanco Valdés, president and vice president of the Bank of Guatemala (Banguat) and the JM, stated on the night of March 20 that it was decided to keep the reference rate at 5%, after knowing the figures of the external situation, especially the performance of the United States economy, and the country’s main macroeconomic indicators, which remain stable.

The officials stressed that inflation – which is the general increase in prices in the economy – maintains a downward trend, since in 2023 it closed at 4.18%, in January of this year it was 3.82% and in February it closed at 3.3% .

The movement of the reference rate began in May 2022, when inflation was already showing a pronounced rise associated mainly with external factors, according to the authorities, such as the constant increase in the price of oil, international geopolitical conflicts, increases rates by the United States Federal Reserve (Fed) and maritime freight adjustments.

Indicator count

From May 2022 to date, the leading rate has risen from 1.75% to 5%