The increasing flows of remittances coming into the country are the main reason behind the appreciation of the Quetzal against the Dollar. So far this year the Bank of Guatemala has had to intervene by acquiring more than us$1 billion, thus increasing monetary reserves.
Prensalibre.com explains that “…Actions taken during the year by the Banguat duplicate the operations carried out in the past five years and represent a strong emission of quetzales into the economy. ”
Economist Érick Coyoy said that “… the Monetary Board must review the exchange rate policy, ‘because there is an accumulation of monetary reserves and increased issuance of unbacked quetzales. It gives the impression that the interventions in the foreign exchange market are not causing the desired effect, because they are injecting more quetzales into the economy, which are absorbed by rising prices, ie higher inflation.'”