GUATEMALA RAISES BANKING SECURITY MEASURES IN RESPONSE TO COVID-19 PANDEMIC
Boosting Investor Confidence Amidst a Resilient Economic Response to the Pandemic
In a bid to enhance investor confidence, Guatemala’s credit rating has been raised by leading international agencies following the country’s robust economic response to the COVID-19 pandemic. This development marks a significant step towards promoting economic growth and stability in the region.
Inflation Expectations Decrease Amidst Interest Rate Hike
According to recent data, inflation expectations have decreased in recent months, with an annual rate of 8.32% in April 2023. In response, the Bank of Guatemala (Central Bank) hiked interest rates to 5% in April 2023, as part of efforts to control inflation and stabilize the economy.
Banking Sector Sees Significant Growth
The country’s banking sector has also seen significant growth, with private sector credit rising to GTQ213,048.90 million in March 2023. The Guatemalan banking system is subject to oversight by the Banking Superintendence (SIB), an organ of the Central Bank, which ensures compliance with laws and regulations to prevent money laundering and terrorism financing.
Key Statistics
- Credit rating: raised by leading international agencies
- Inflation expectations: decreased in recent months
- Private sector credit: rose to GTQ213,048.90 million in March 2023
- Banking system: comprises 18 banks, 11 financial companies, and other institutions
- Total net asset value: GTQ486,323 million at the close of 2022
- Interannual increase: 11.9% due to growth in credits, investments, and deposits
Enhancing Efficiency in Civil and Commercial Justice System
Guatemala’s civil and commercial justice system is undergoing a transition towards electronic procedures, aiming to enhance efficiency and reduce response times. Recent amendments to the Code of Civil and Commercial Procedure have enabled electronic filing, which will have a long-term impact on promoting faster court responses.
Legislative Measures Aimed at Improving Economic and Investment Conditions
In response to the pandemic, Guatemala has implemented various legislative measures aimed at improving economic and investment conditions. These include:
- New Leasing Act
- Act to Promote Investment of Foreign Capital
- New Insolvency Act
- Amendments to the country’s Free Trade Zones Act
Expert Counsel on Banking Regulations
“Guatemala’s banking security measures are crucial for promoting investor confidence and economic growth,” said a spokesperson for the Banking and Finance Practice Group at Mayora & Mayora. “Our team of professionals is dedicated to providing expert counsel on structuring contracts, secured transactions, and compliance with local banking regulations.”
As Guatemala continues to navigate its post-pandemic recovery, investors can expect to see continued efforts to strengthen the country’s financial sector and improve business conditions.