The Monetary Board of the Bank of Guatemala unanimously left the policy-setting “leading interest rate” unchanged at 3.50 percent, judging that resilient domestic activity and still-subdued inflation outweigh emerging upside risks linked to higher oil prices and heightened geopolitical tensions in the Middle East. After four consecutive 25 bp cuts between August 2025 and February 2026 that lowered the rate by a cumulative 100 bp, the Board now pauses. Annual inflation fell further below the 3–5 percent target band to remain under its lower bound in February 2026, thanks to favourable food supply shocks and lower fuel costs, while growth indicators support the 2026 GDP forecast range of 3.1–5.1 percent. The Board warned that a prolonged Middle East conflict could lift imported inflation and marginally slow Guatemala’s expansion by pushing up global crude prices. It reaffirmed its readiness to act as needed and will continue to monitor external and domestic conditions to ensure inflation stays within the target.
Bank of Guatemala2026-03-25
Bank of Guatemala keeps policy-setting leading interest rate unchanged at 3.50 percent
Bank of Guatemala’s Monetary Board kept the leading rate at 3.50 %, pausing after four 25 bp cuts since Aug 2025, as growth remains solid and February inflation stayed below the 3–5 % target range. The Board flagged potential imported price pressures from higher oil amid Middle East tensions and reiterated readiness to adjust policy if needed.