GTQ - Guatemalan Quetzal

Overview of the Guatemalan Quetzal (GTQ)

The history of the formation and development of the Guatemalan Quetzal (GTQ)

In 1925, the Guatemalan Quetzal was first introduced during the presidency of José María Orellana - a Guatemalan political and military leader. His image appears on the front of the 1 Quetzal banknote.

The Quetzal was introduced to replace the Guatemalan Peso at an exchange rate of 1 Quetzal = 60 Pesos. In 1987, the value of the Quetzal was maintained at par with the US dollar.

The Guatemalan Quetzal (GTQ) Denominations

• Guatemalan Quetzal coins

In 1925, Guatemala issued coins with denominations of 1, 5, 10 centavos, ¼. ½ and 1 quetzal. However, the 1 quetzal coin was withdrawn from circulation.

In 1932, the ½ and 2 centavo coins were issued. 

Until 1965, coins from 5 centavos and up were minted with 72% silver. The ½ and 1 quetzal coins were reissued in 1998 and 1999.

Currently, the circulating Guatemalan Quetzal coins are disc-shaped and feature the Guatemalan coat of arms on the front: 1, 5, 10, 25, 50 centavos, and 1 quetzal.

• Guatemalan Quetzal banknotes

In 1993, denominations of 1, 2, 5, 10, 20, and 100 quetzals, along with the ½ quetzal note, were issued by the Central Bank of Guatemala. 

In 1946, the Bank of Guatemala took over the issuance of banknotes, and the first issuance was printed over the banknotes of the Central Bank. 

In 1967, the 50 quetzal banknote was issued. The denominations of paper money remain unchanged. Except for the late 1990s, coins with denominations of ½ and 1 quetzal replaced the paper bills of the same denomination.

Especially in the upper right corner of each banknote, the value is represented in Maya numerals to honor Guatemala's cultural heritage.

The exchange rate of the Guatemalan Quetzal (GTQ)

The Guatemalan Quetzal has an exchange rate that is not high compared to strong currencies in the world. However, the GTQ has a stable exchange rate within the region. 

Currently, the exchange rate is 1 USD = 7.80 to 8.00 GTQ. This exchange rate will change over time.

Compared to currencies around the world, GTQ is considered a weaker currency. The reason is the small scale of the economy and some domestic economic issues. However, in the Central American region, the GTQ still maintains a certain position.

Factors affecting the value of the Guatemalan Quetzal (GTQ)

The Guatemalan Quetzal is relatively stable compared to other currencies in the Central American region. But its value is lower than that of the US dollar. Below are the factors that affect the value of the GTQ: 

• Economic situation: The economic growth of Guatemala significantly affects the value of the Guatemalan Quetzal. If the economy develops, the demand for the Quetzal will also increase, raising the value of the GTQ. In addition, high inflation rates can decrease the value of the currency. 

• Monetary policy: The Central Bank adjusting interest rates directly impacts the value of the GTQ. If the bank raises interest rates, the value of the Guatemalan Quetzal increases due to attracting foreign investment.

• International trade: The balance of trade also affects the value of the Guatemalan Quetzal. If Guatemala tends to export more than it imports, the value of the GTQ will increase. Trade relations with other countries, especially the United States, will also have a significant impact on the value of the GTQ.

• Political situation: The political stability in Guatemala affects investor confidence and impacts the value of the Quetzal. Conversely, political instability can lead to a decrease in the value of the currency due to higher risks.

• Natural conditions: Guatemala faces natural disasters such as hurricanes and frequent floods. These events can affect economic activities, indirectly reducing the value of the Quetzal.

The value of the Guatemalan Quetzal (GTQ) is influenced by many economic, political, trade balance, and social factors. Although it is not a strong currency on the international market, it is relatively stable within the Central American region. To enhance the value of the Guatemalan Quetzal (GTQ), it is essential to implement a multifaceted approach involving both economic and fiscal policies. Strengthening the local economy through sustainable development initiatives, promoting exports, and attracting foreign investment can bolster demand for the currency. Additionally, prudent monetary policies enacted by the central bank, such as controlling inflation and ensuring stable interest rates, will further instill confidence in the Quetzal. Furthermore, improving infrastructure and education will enhance productivity and economic resilience, ultimately leading to a more robust currency valuation.