What is the reason for the slight rise in the price of the dollar in recent weeks against quetzal?

On August 1, the reference exchange rate was quoted by the Bank of Guatemala (BGU) at Q7.72, the official rate yesterday was Q7.82, the 53-day period increased by a dime, and the economic authorities called. They should not be upset, as it is a normal behavior.

In system banks, the currency fluctuates either for buying or selling between Q0.20 to Q0.30 as margin, for selling it was priced up to Q7.95 at the dealership and for buying at Q7.65, on average. was observed yesterday.

Statistics show that the average exchange rate during January-August was Q7.68 per US dollar to buy and Q7.72 to sell, while during 2021 it was Q7.71 to buy and Q7.75 to sell.

What explains that?

Alfredo Blanco Valdes, Vice President of Banjoat and Monetary Council, announced at a press conference some of the elements observed in the foreign exchange market, but stressed that “the behavior of the exchange rate continues to maintain stability.”

He explained that in the Q7.81 per US dollar report (Wednesday, September 21st), this is due to the seasonal behavior of the variable; There is nothing abnormal, and it is so common in these months of the year that it appears in all the previous exercises.

“We know that in this period, the demand for foreign currencies for imports is increasing by the end of the year, and companies are looking for dollars to be able to buy,” he said at the conference.

In addition, another variable was revealed, since in the international context there is a decrease in the rates of sea transport, especially in the cost of container freight (on the roads to China), which has decreased and, despite the delay, is transferred to the Guatemalan market, a situation It is exploited and coincides with the increase in imports of Christmas goods.

The central bank official emphasized that this behavior “happens exactly at the end of July until October, so that it is nothing abnormal and economic customers are calm.”

In any case, he emphasized that the trend is being observed, If you have been involved in the institutional foreign exchange market to avoid volatility, and “this big volatility is not appropriate, in that sense, we have gone out in recent days to sell about $342 million, which over the years to keep the exchange rate more.

Blanco Valdes reiterated that there is no reason for economic agents to form expectations of the exchange rate rising or falling and that is why the central bank is there to ensure its stability at all times.

periodic behavior

For Paul Poteau, CEO of the Libertad y Desarrollo Foundation, two reasons explain the trend in the exchange rate in recent weeks: The first is due to the cyclical behavior associated above all with year-end purchases, in which companies stock up on seasonal products; The second is due to the increase in prices that takes in imported products, which generates greater pressure to buy the dollarAnd that’s what we’re looking for.

The analyst has no idea that there is still an outflow of capital, this is not the effect, but in the near future some kind of slowdown in transfers can be observed, and this may be surprising in the upcoming monthly data, but that in general, the dollar is at its peak now Because all currencies are dropping against the dollar, it would be strange if we didn’t join that wave.

As of September 15, the foreign exchange income from family remittances is $12.502 million and a growth rate of 20.7%, and by the end of the year, the income of $17.590 million is estimated to have double-digit growth compared to 2021 ($15,295 million), which is a historic figure. It is estimated for 2023 at $18,645 million.

Interventions

BANGAT intervenes in the market to mitigate exchange rate fluctuations through the participation rule.

The purpose of participation is to mitigate fluctuations (up or down) in the nominal exchange rate, without affecting the trend.

As of September 20, Banguat has exited to participate in purchases of US$1,694 million and sales of US$743 million, which adds up to US$2,437 million.

In 2021, the total amounted to $2,202.9 million and in 2020 purchases and sales were $5,511 million, $84 million and $389 million, respectively.

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