A press release from the Bank of Guatemala reads:
THE MONETARY BOARD RAISES THE LEADING INTEREST RATE OF THE MONETARY POLICY FROM 5.00% TO 5.50% AS OF THURSDAY 29 SEPTEMBER 2011
The Monetary Board in its meeting held on September 28, 2011, after being updated on the Balance of Inflation Risks, resulting from mechanical shifting of the Macroeconomic Semi-Structural Model and orientation of the indicative variables, based on a comprehensive analysis of internal and external economic events, decided by a majority to raise the level of the leading monetary policy interest rate by 50 basis points from 5.00% to 5.50%.
In its analysis, the Monetary Board took into consideration that, although a slowdown in global economic growth is expected, in an environment of fiscal and financial risks, especially in the Euro Zone, the world economy will be registering growth rates of 4.0 % in 201 and 2012.
Additionally, the moderation in recent weeks of international oil prices, and those of corn and wheat, has not been reflected significantly in price projections for those products.
The Monetary Board took into account the dynamism of the main indicators of domestic economic activity, such as foreign trade, tax collection, bank loans to the private sector and the behavior of core inflation, which is showing inflationary pressures due to aggregated demand and increased volatility due to the secondary effects of supply shocks that have impacted the behavior of inflation.
Additionally, the Monetary Board emphasized that there has been a deterioration in inflation expectations, so they felt that monetary policy should act decisively to bring down inflationary expectations and moderate runoff effects in the behavior of inflation .
Source: CentralAmericaData.COM
More on this topic
July 2011
The Bank of Guatemala has increased the monetary policy leading interest rate from 4.75% to 5.00% taking effect from 28 July.
In its analysis, the Monetary Board took into consideration that the global economy is continuing to expand, albeit at a slower pace than expected.
April 2012
The Monetary Board of the Bank of Guatemala has taken the decision based on comprehensive analysis of the foreign and domestic situation.
A statement from the Bank of Guatemala reads:
THE MONETARY BOARD HOLDS LEADING MONETARY POLICY INTEREST RATE AT 5.50%
Guatemala, April 25, 2012
April 2009
The Monetary Board reduced the monetary policy's leading rate by 0.5 base points, from 6.25% to 5.75%.
According to Antonieta de Bonilla, chairperson of the Monetary Board, the measure seeks to reduce the cost of bank credit.
Lorena Alvarez in her article in Elperiodico.com.gt, published statements by the chairperson: "The leading rate was reduced by 0.50 base points because inflation expectations have been reduced and it is anticipated to end this year at 5%."
February 2012
The Monetary Board has maintained the leading interest rate for monetary policy at 5.5%.
At its meeting held on February 15th , 2012, the Monetary Board decided unanimously to maintain the level of the monetary policy leading interest rate at 5.50%, based on a comprehensive analysis of economic and financial events, internally and externally, after having been informed about the Inflation Risks Balance, as well as the results of the first implementation in 2012 of the semi-structural Macroeconomic Model and the orientation of the indicative variables of monetary policy, according to a press release by Banguat.
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