Banguat's inflation-targeting anchor and Guatemala's remittance-driven stability

Compared with the volatility that marks many of its regional peers' charts, Guatemala's 1980-2025 series for inflation and the exchange rate look remarkably flat, a pattern the Banco de Guatemala, known as Banguat, traces to its inflation-targeting framework and to the sheer scale of family remittances. Under its explicit numerical inflation target of 4 percent, plus or minus 1 percentage point, Banguat has kept consumer prices inside or close to that band for almost every year since the 2008-09 global recession, with only brief breaches during the 2022 global inflation shock. Remittances, sent mostly by Guatemalans working in the United States, have grown into the dominant force in the balance of payments, reaching an estimated 25.5 billion dollars in 2025, equal to about 21 percent of GDP, an all-time high. In its 2025 monetary policy report, Banguat noted the quetzal had appreciated roughly 1 percent against the dollar even as it bought over 1.8 billion dollars in the foreign-exchange market simply to dampen swings without resisting the currency's underlying trend. That remittance inflow, rather than exports or foreign investment, is now the primary reason Guatemala's currency and reserves charts have stayed so calm through global shocks that battered neighboring economies.