Monetary Policy

Year-over-year inflation in Honduras eased to 5.83% in June, moving toward the central bank's medium-term target range of 4.00% plus or minus 1 percentage point.

Roberto Lagos, president of the Central Bank of Honduras, said July inflation data should show a deceleration, and the bank will review monetary-policy instruments to reduce excess money supply without harming credit growth, which has risen 6.7% in the first seven months of 2026.

Former president of Honduras's economists' association Liliana Castillo projects the lempira could depreciate to 27 per US dollar by September if it continues declining at its current rate of about 6 centavos monthly, a gradual depreciation she says would cushion domestic prices better than a sharper drop.

The Honduran central bank will overhaul its monetary program following the IMF's successful review of Honduras's economic plan, which unlocks a disbursement of roughly $240 million and aims to move toward a more flexible exchange market while maintaining inflation control.

The Asfura administration has sent a letter of intent to IMF chief Kristalina Georgieva as the current three-year, $822 million program nears completion, though officials say no decision has been made yet on whether to pursue a new agreement.

Honduras's net international reserves have accumulated $1.346 billion since January 27, with import coverage rising to 6.7 months, according to the central bank.

The Central Bank of Honduras kept its policy rate (TPM) at 5.75%, with interbank and central bank window rates aligned to that benchmark.

Credit to Honduras's private sector continues to grow favorably, driven by domestic-currency financing to businesses in productive sectors including services, real estate, and agriculture.

Honduras's banking system is reallocating resources toward domestic investments, particularly voluntary holdings of Central Bank securities and instruments issued by the government and state power utility ENEE.

The Central Bank of Honduras says its external position is solid, supported by rising foreign-exchange reserves and favorable inflows that have maintained a positive net flow of hard currency.

Central Bank President Roberto Lagos said Honduras must prepare monetary and fiscal measures aligned with IMF recommendations to contain inflation, while currently monitoring how fuel prices ripple through the economy; he indicated no immediate rate adjustment is needed given US Federal Reserve policy.

Honduras's net foreign reserves have accumulated $1.124 billion since January 27, the Central Bank reported, with import coverage holding steady at 6.6 months.

Honduras's net international reserves have accumulated $1.13 billion since January 27, the central bank reported as of June 25, while import coverage held steady at 6.6 months.

As of March 2026, Honduras's foreign-exchange reserves reached 144.4% of the IMF's recommended sufficiency level (100%–150%), exceeding the prudential threshold and bolstering the country's ability to withstand external economic shocks.

Interest rates on new loans and deposits in Honduras are falling, especially in lempiras, as bank deposits grow and credit conditions normalize across the financial system.

The Central Bank of Honduras says strengthening net international reserves are boosting liquidity in the economy, prompting active monetary management to control excess liquidity and preserve price stability.

Honduras's net foreign reserves reached $1.19 billion as of June 19, up sharply from late January, while import coverage remained stable at 6.6 months.

Honduras's net foreign reserves grew by $1.18 billion from late January to mid-June 2026, while import coverage remained stable at 6.6 months of goods and services.

Economist Guillermo Matamoros says the Central Bank of Honduras must implement mitigation measures as inflation indicators suggest it will exceed the bank's target range, though May data shows a slowdown from April.

Demand for the Central Bank's short-term reverse-repurchase operations (RVG) continues falling as banks face greater system liquidity and higher relative costs, while interbank market trading (MED) grows as an alternative funding source.

Honduras's central bank forecasts year-over-year inflation of 4.98% by December 2026, declining to the bank's target range of 3.0%–5.0% by May 2028.

Honduras's net international reserves increased by $1.067 billion from January 27 to June 11, 2026, with import coverage holding steady at 6.6 months of goods and services.

Private-sector credit in Honduras is expanding faster, driven by declining interest rates and increased lending to businesses, the Central Bank reports.

Finance Minister Emilio Hernández and Central Bank President Roberto Lagos signed a letter of intent to the IMF ahead of the June 29 board review, with officials saying approval could unlock about $240 million in fresh funds and help stabilize the economy.

Year-over-year inflation in Honduras reached 6.09% in May, driven partly by Middle East conflict impacts, temporarily exceeding the central bank's medium-term tolerance range of 4.00% plus or minus 1 percentage point.

The central bank reports that credit to Honduras's private sector continues expanding, fueled by rising demand for business financing tied to stronger investment and economic activity.

Economists say Honduras should revise its monetary program to counter inflation driven by fuel-price increases, and restructure the state power utility ENEE to reduce losses, cut political interference, and stabilize the electricity system.

Honduras has accumulated $1.027 billion in net international reserves since late January, with import coverage now at 6.5 months, the Central Bank reports.

Honduras's currency depreciated again on June 5, with the central bank's daily forex auction setting the dollar at L26.67 for purchase and L26.80 for sale, continuing a sustained slide blamed on IMF-backed exchange-rate policy adjustments.

Honduras's net international reserves accumulated $1.16 billion between January 27 and May 22, 2026, maintaining import coverage of 6.6 months, the Central Bank reported.