Relative clause and its subject

Question

I came across this sentence on Cambridge Dictionary

The central office sets the parameters that guide policy at the local level.

The example comes with a translation in a different language, but I got confused by it.

The translation implies that it is the central office that guides policy at the local level instead of the parameters.

I thought "that guide policy at the local level" modifies parameters instead of central office, so it should be the Parameters that do the guiding, not central office .

So, Is the translation wrong or my understanding of the sentence is incorrect?

Answer 1

"That" always has a connection to the noun, gerund or clause that stands before it.

Split the sentence:

• The central office sets the parameters.
• The parameters guide policy at the local levels.