The quetzal, also denoted by GTQ, is Guatemala's original national currency whose name stems from the country's official bird, the Quetzal. In ancient Mayan culture, the bird's feathers were used as currency; thus, today's currency holds a strong historical and cultural value. The quetzal, which is divided into 100 centavos, was pegged to the United States Dollar (USD) until 1979 when it assumed a floating regime. An important event in the currency's history is that in May 2001, the quetzal acquired a parallel legal currency: the USD. Guatemala was the third Latin American country to undergo "dollarization."
Sovereign Ratings for Guatemala
| Moody's Rating |
| Ba2 |
| S&P Rating |
| BB- |
|
Sovereign credit ratings play an important part in determining a country's access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets. |
What does it look like?
Political Structure
The Republic of Guatemala is divided into 22 departments. There are three branches of government: the executive, the legislative, and the judicial. The President and Vice President of the Republic lead the executive branch. The legislature is a unicameral Congress consisting of 80 members that are elected to four-year terms by popular vote. The judiciary consists of the Supreme Court of Justice and the Court of Constitutionality, both of which are presided over by the President of the Supreme Court.
Prominent Figures
The President of Guatemala is Oscar Berger Perdomo, who was elected in 2003 and will be eligible to run for re-election in 2007. The central bank of Guatemala is called El Banco de Guatemala, and is led by Lizardo Arturo Sosa Lopez.
Unique Characteristics
Through the signing of a peace accord in 1996, which ended 36 years of civil war in Guatemala, a major obstacle to foreign investment was removed. Guatemala's widespread political violence and corruption, however, continue to dampen investor confidence. By limiting investor confidence, the faith in the value of the quetzal and capital inflows are likewise limited.
Key Economic Factors
Guatemala, the largest Central American country and with the highest population, has a GDP per capita that is approximately one half that of Argentina, Brazil, and Chile.
The Guatemalan economy is mostly an agricultural economy that relies heavily on exports of coffee, sugar, and bananas. After years of civil war, Guatemala signed peace treaties in 1996, which ended many obstacles for foreign investment.
Almost 75% of the Guatemalan population is below the poverty line.
Low government revenues, poor governmental financial operations, the trade deficit, drug trafficking, and political violence continue to be problems that negatively affect Guatemala's economy.
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