Bank of Guatemala holds monetary policy rate at 3.50%

The Monetary Board of the Bank of Guatemala unanimously held the monetary policy rate at 3.50% on April 29, 2026, saying low inflation conditions still prevail even as imported price pressures from higher international fuel costs have increased, while most short-term domestic indicators continue to show positive growth consistent with projected economic expansion of 3.1% to 5.1% in 2026 and 3.0% to 5.0% in 2027. Headline inflation rose to 2.50% in March 2026 but remained below the lower bound of the Monetary Board’s 4.0% +/- 1 percentage point target, and the Board said forecasts and inflation expectations still point to inflation staying within target in 2026 and 2027. It warned, however, that a prolonged energy price supply shock linked to the geopolitical conflict in the Middle East could affect Guatemala’s economic outlook and add upside risks to inflation. The Board also said the global growth outlook for the current and following year remains positive, supported by resilient private consumption and still-favourable international financial conditions, although uncertainty and downside risks remain high because of the Middle East conflict and persistent protectionist trade policies; it highlighted that the Strait of Hormuz blockade has driven a substantial rise in oil prices. The Monetary Board said it will continue to closely monitor key external and domestic indicators and adopt the measures needed to keep inflation within target.