Thursday, February 26, 2009

Dollar Rises to Highest Level Since 2004

The quetzal exchange rate reached the highest level in four and a half years, reaching Q7.98 to the U.S. dollar, according to figures from Banguat. In the financial markets, the quetzal is trading slightly above 8.

The last recorded high occurred on August 2, 2004, when the exchange rate of Central Bank reached Q8.01 to the dollar.

Business sectors such as importers, retailers, and housing said that this high figure affects them. Inputs are expensive to buy which depresses consumption.

Comparing the rate to a year ago, the quetzal was at Q7.70 per dollar, an increase of 3.6 percent.

"We are hit hard because in addition to the cost of goods we buy, we also pay more to in duties and VAT," said the president of the Guatemalan Chamber of Commerce, Jorge Briz.

He added that the increase in the exchange rate affects imports. February 12 showed a drop of -28.9 per cent over the same period last year, which means that U.S. $395.7 million less goods were imported than in 2007.

Thomas Dougherty, president of the Chamber of Industry, said that the high rate impact imports of raw materials, but also provides a benefit to exporters.

Housing is also affected. A house that a year ago cost Q770,000 now costs Q798,000 an increase of Q28,000.

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