Friday, January 05, 2007

La Tierra del Quetzal

There's been an acute shortage of Quetzales in Guatemala this Christmas. Visitors turning up with the expectation of living off the funds they can take out of the ATMs have been in for a nasty surprise. When not unplugged the cash machines in Antigua have been acting briefly as the omega points for monster queues.

A friend of ours went to withdraw money from her bank account and was handed US dollars as there weren't enough Quetzales, she was told, while another was given a wad of billetes shucos, that should have been sent to the furnace ages ago.

The underlying cause of the cash crisis has been the collapse of Bancafe followed by a run on Banco G&T which was deliberately targeted by malicious whisperers. Come Christmas most of the dosh in Guatemala was sitting in suitcases under people's beds. I have also heard it rumoured that the government has somehow found a way to simultaneously cock-up the process of printing new notes.

UPDATE: 80m Quetzales worth of new bank notes will be hitting the streets in the next few days.

Had another bank gone tetas arriba before the end of the year the consequences for the Guatemalan economy would have been serious indeed. However, there are positive signs around. Citigroup recently purchased both the bank we use, Banco Uno, and Banco Cuzcatlan. They are the only two banks with comprehensive representation across Central America and although they are competitors, the American financial giant clearly wished to prevent any of their own rivals getting hold of a group with that kind of geographic reach. As a result the other banks in Central America are looking to consolidate in order not to get left behind.

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