Guatemala Court Halts Central Bank Chief After 7 Days

GUATEMALA · ECONOMY

The ruling also voids every decision Menkos took in office, including a management reshuffle at the bank.

Guatemala’s Constitutional Court provisionally suspended the head of the Guatemala central bank on Thursday, 8 October. Jonathan Menkos, a former finance minister, had been in the post for one week.

The ruling matters beyond Guatemala City. Minutes before it emerged, the US Embassy warned on X that the bank must not be politicised.

The central bank, the Banco de Guatemala, manages the quetzal and the country’s reserves. It also tracks remittances, the money that Guatemalan migrants, most of them in the United States, send home.

What the Constitutional Court Decided

The court is Guatemala’s highest authority on constitutional disputes. Prensa Libre, Guatemala’s largest newspaper, reported a 3–2 vote by the five sitting judges.

La Hora instead listed four votes in favour and two dissents, counting a substitute judge.

The judges granted provisional relief, known as an amparo, to two challengers. One is Cacif, the country’s main private-sector federation; the other is Allan Rodríguez, a congressman for the conservative opposition party Vamos.

Their core argument was that Menkos never gave up his seat in Congress. He had been on leave from it since January 2024, when he became finance minister.

La Hora, a Guatemala City daily, reported that the order also cancels every act Menkos took since taking office. That includes the board’s acceptance of senior managers’ resignations this week.

The court told President Bernardo Arévalo to check that any future nominee meets all legal requirements. It named articles 14 and 28 of the central bank’s organic law, which set out qualifications and incompatibilities.

Who Runs the Guatemala Central Bank Now

Vice President José Alfredo Blanco Valdés takes over the bank and its Monetary Board, the body that sets interest rates. He has been deputy governor since October 2018, according to AGN, the state news agency.

La Hora reported that Blanco is a career central banker with more than two decades at the institution. He holds a master’s degree from American University in Washington, DC.

Article 29 of the bank’s organic law lets the vice president stand in during a temporary absence. A permanent vacancy would require a new presidential appointment.

The board held the benchmark rate at 3.50% on Wednesday, 23 September, by unanimous vote, a central bank bulletin shows. Annual inflation reached 4.69% in September.

How Arévalo and Washington Reacted

Arévalo, a centre-left reformer in office since January 2024, swore Menkos in on Thursday, 1 October. At that ceremony he called the bank’s autonomy and independence its main task, AGN reported.

At his weekly press conference on Thursday, he said the government had not yet been notified. He would study the ruling’s scope “once I have it in my hands,” he said, according to La Hora.

He declined to say whether he would renominate Menkos if the economist resigned from Congress. He confirmed Blanco in his post and said he shared the embassy’s view that the bank must stay technical and independent.

The embassy said the United States would “never remain silent” over attempts to politicise the bank, La Hora reported. It also said it respected the court’s authority to act independently.

What It Means for You

For US investors, the dispute touches one of the most closely watched institutions in Central America. Guatemala sells US$-denominated bonds abroad, and investors watch whether its central bank stays independent.

For Guatemalan families in the United States, the bank’s steadiness matters because remittances are converted at its reference rate. On Friday, one US$ bought about GTQ 7.63, using open.er-api.com rates.

For Washington, the case is a test of institutions in a country central to US migration and anti-drug policy. The embassy’s public comment shows how closely it is following the bank.

What Is Not Known

The full court resolution was not yet posted on the Constitutional Court website on Friday morning. The voided acts come from Prensa Libre and La Hora, which give different vote tallies (3–2 and 4–2).

It is unclear when the court will issue a final ruling, or whether Menkos will resign his seat. The status of the new managers named this week has not been confirmed by the central bank.

The embassy’s X post could not be viewed directly and is quoted as La Hora reported it.

What Comes Next

The ruling takes effect once the presidency is formally notified, La Hora reported. Arévalo can then challenge it, wait for a final ruling or name a new candidate.

The suspension does not remove Menkos for good, and it does not change the 3.50% policy rate.

Frequently Asked Questions

Who is Jonathan Menkos?

He is an economist who served as Guatemala’s finance minister under President Bernardo Arévalo. He was sworn in as central bank president on Thursday, 1 October.

Why did the court suspend him?

Challengers argued he could not run the central bank while keeping his seat in Congress. The court found grounds to suspend him while it reaches a final ruling.

Who runs Guatemala’s central bank now?

Vice President José Alfredo Blanco Valdés leads the bank and its Monetary Board on an interim basis. The bank’s organic law lets the vice president stand in during a temporary absence.

Does the ruling affect the quetzal or remittances?

There is no sign of market stress so far, and the quetzal traded near 7.63 per US$ on Friday. Policy decisions now rest with the board under the interim chief.

Sources: AGN, Guatemala state news agency, 1 October 2026; Banco de Guatemala, rate bulletin, 23 September 2026; Constitutional Court of Guatemala, communiqués; Prensa Libre; La Hora, Arévalo press conference; La Hora, interim chief; La Hora, Arévalo on embassy post; La Hora, US Embassy post; La Hora, magistrates’ votes (all accessed 9 October 2026).