Emerging Markets Rates and Currencies Handbook

92 Citi | Emerging Markets Currencies Handbook 2021 Regulation allows clients to have deposit accounts in foreign currencies, but the GTQ is only liquid against the USD. Other currencies should be crossed against USD. Benchmark spot orders are not available in the Guatemalan GTQ market. Even though the forward market has been developing for the last 10 years, the forward market currently provides poor liquidity and low activity levels. Only 4 of the 12 banks operating in the country offer this instrument. The low volatility of the GTQ offers little incentive for an active and liquid local FX derivative market. There is no active interbank market for forwards onshore, only Citibank makes markets in forwards. Convertibility The GTQ Currency is fully convertible. Market opening hours and liquidity during the day 12.30 16.30 08.30 Good Liquidity No Liquidity Moderate Liquidity Fixing (incl. ticker) The Fixing rate used is the Official Rate published by the Central Bank. This rate is the weighted average of all transactions above $20K traded on the Central Bank’s SPID system (Sistema Privado Interinstitucional de Divisas), a day before its publication. Bloomberg Ticker: {GTQ BDEG Curncy} The fixing rate used to settle FX NDFs is set one day prior to NDF settlement (T-1). Regulation Offshore restrictions Clients are free to trade in either direction and size depending on liquidity, as per “Ley de Libre Negociacion de Divisas”. Trades must be executed through a regulated financial institution or registered exchange house. Offshore entities can trade onshore and onshore entities can trade offshore. Non-resident restrictions Non-residents need to trade with an approved financial institution or exchange house. Local requirements need to be met by non-residents, such as documentation from the Intendencia de Verificacion Especial (IVE) to trade with the approved financial institution. License requirements No license required. Requirements to open a foreign currency account It is possible to open foreign currency accounts in Guatemala with financial institutions. Requirements are the same as for local currency accounts. FX Spot FX Forwards NDFs FX Options Interest Rate Swap Interest Rate Options XCCY swaps Market Overview Onshore Available on a case by case basis Offshore Onshore volume (MM USD daily) 140 — 160 1 1 — 3 N/A N/A N/A N/A Offshore volume (MM USD daily) 3 — 5 Negligible 1 — 3 N/A N/A N/A N/A Onshore max tenor (or typical tenor for spot) T + 0 1 years 1 year N/A N/A N/A N/A Offshore max tenor (or typical tenor for spot) T + 2 1 years 1 year N/A N/A N/A 5 years, on case by case basis Onshore typical deal size (MM USD) 0.5 — 1.5 2 2 N/A N/A N/A N/A Offshore typical deal size (MM USD) 0.5 — 1.0 Episodic 0.1 — 0.5 N/A N/A N/A N/A CitiFX Pulse Capabilities (onshore) CitiFX Pulse Capabilities (offshore) Source: Citi indicative information Guatemala