Guatemala: Currency & Financial System

Guatemala's national currency, the quetzal, takes its name from the country's brilliantly plumed national bird and has circulated since 1925, when the government of President Jose Maria Orellana replaced the Guatemalan peso at a rate of sixty to one. The Bank of Guatemala, the country's central bank, assumed full authority over paper currency issuance in 1946, consolidating a monetary system that had previously been shared among several private banks. For more than six decades after its introduction, the quetzal was formally pegged at parity with the United States dollar, a policy that lasted until 1987.

Since that peg ended, the quetzal has traded without a fixed exchange rate, with the Bank of Guatemala overseeing its value in the domestic foreign exchange market in coordination with the Junta Monetaria, or Monetary Board, which sets broader monetary and credit policy. Commercial banking is supervised separately by the Superintendencia de Bancos, or Superintendency of Banks, which licenses and monitors the country's financial institutions under laws the Monetary Board administers. As of 2026, this three-part structure of central bank, Monetary Board, and banking superintendency remains the framework governing Guatemala's financial system.

Remittances sent home by Guatemalans working abroad, overwhelmingly from the United States, are a defining feature of the country's financial life. As of 2023, the most recent year for which comparable figures are widely available, these transfers equaled roughly 19 percent of Guatemala's gross domestic product, among the highest shares of any economy in Central America. The inflows move largely through the formal banking sector, making remittances a major source of foreign-currency liquidity and a significant driver of consumer spending across the country.