What is the Guatemalan Quetzal (GTQ)?
GTQ is the foreign exchange abbreviation for the Guatemalan quetzal. It is the official currency of Guatemala, and is subdivided into 100 centavos.
As of August 2020, 1 GTQ is worth US $0.13.
- The Guatemalan quetzal (GTQ) is the official currency of Guatremala, first appearing in 1924.
- The quetzal is a free floating currency, but was once pegged to the U.S. dollar and before that adhered to the gold standard.
- Guatemala is the largest economy in Central America, and tenth-largest in Latin America.
Understanding the Guatemalan Quetzal
The quetzal first appeared in 1924, named after the quetzal bird in order to commemorate the ancient Mayans’ use of the bird’s feathers as currency. Modern banknotes prominently feature pictures of these long-tailed birds. In 1925, the currency officially replaced the Guatemalan peso, which had in its turn been issued in 1859 to replace the Central American real.
The Central Bank of Guatemala, established in 1926, issued the currency at a rate of 1 quetzal to 60 pesos at the time. The government initially linked the currency to the gold standard and then later pegged it to the U.S. dollar at par. Following a political revolution in Guatemala in 1944, the country moved from a dictatorship to more democratic government institutions. The government established the new Bank of Guatemala in 1945, and that entity took over the issuance of currency from the Central Bank of Guatemala in 1946. The newly created bank issued a new series of banknotes and took over the minting of coins.
Since 1987, the central bank has allowed the quetzal’s exchange rate to float freely against foreign currencies. Nevertheless, after an initial climb following the removal of its peg, the quetzal’s value has remained relatively stable in a range of approximately 7 to 8 quetzal per U.S. dollar since 2000.
Overview of Guatemala’s Economy
Guatemala and Belize form the northern edge of the Central American isthmus. Mexico borders Guatemala to the west and north, with Belize to the east. Honduras and El Salvador border Guatemala to the southeast, with Honduras along the Caribbean Sea coast and El Salvador to the south, along the Pacific.
Despite boasting one of the largest economies in Central America, Guatemala suffers from high rates of wealth inequality, with more than half the country living below the national poverty line according to U.S. Central Intelligence Agency statistics. Since 2018, the U.S. State Department has issued a travel advisory urging that potential tourists reconsider their travel plans due to high levels of violent crime and gang activity present in the country.
The country’s service sector drives the majority of its economy. The agricultural sector also plays a major role in employment as well as accounting for a substantial percentage of the country’s exports. Cash crops include coffee, sugar, bananas, and other fresh produce. A substantial amount of the money flowing into the country comes from foreign sources, particularly expatriates living in the United States.
The country experienced GDP growth of 3.6% and an inflation rate of 3.7% in 2019, the latest year for which data is available.