Guatemala’s Monetary Board cut the Bank of Guatemala’s policy rate by 25 bp to 3.50 % after judging that inflation risks remain subdued amid firm economic activity, noting January 2026 inflation stayed below the 4 % ± 1 pp target band on favourable food and fuel prices and forecasts still see it undershooting the midpoint this year. The move extends a series of 25 bp reductions delivered in August, September and November 2025, when the rate stood at 4.50 %. Short-term indicators point to 2025 GDP growth of 4.1 %, with 2026 projected at 3.1 – 5.1 % (central estimate 4.1 %), while downside risks have eased following a trade accord with the United States. Externally, oil prices are expected to remain slightly lower in 2026 amid excess supply, helping to contain domestic price pressures. Global growth surprised to the upside in 2025 on robust trade, private consumption and looser financial conditions, though uncertainties around trade and geopolitics persist and inflation abroad, albeit moderating, remains above target in several major economies. The Board reiterated it will monitor economic and price developments and stands ready to act to keep inflation within the target range.
Bank of Guatemala2026-02-18
Bank of Guatemala cuts policy rate by 25 basis points to 3.50 %
Guatemala’s Monetary Board cut the Bank of Guatemala’s policy rate by 25 bp to 3.50 %, saying inflation remains below the 4 % ± 1 pp target band and is expected to stay under the midpoint this year. The move extends 25 bp trims made in August, September and November 2025 (cumulative –100 bp) amid projected 2025 GDP growth of 4.1 % and reduced external risks, with the Board pledging continued monitoring.