Central American leaders dish out strong medicine to fight price hikes
The upward spiral of prices of food and oil has obliged authorities throughout Central America to take strong measures.
Monday, June 30, 2008
Interest rates have been raised and greater restrictions have been imposed on commercial bank lending. Meanwhile, some countries –- such as El Salvador, Honduras and Nicaragua -- have introduced subsidies on fuel, electricity, public transport and basic foods.
Analysis of the international economic scenario, Guatemala's internal situation, and decisions on Leading Monetary Policy Interest Rate.
Costa Rica's inflation in May was 1.91 percentage points higher than in April, raising fears over the future for interest rates. Inflation for the 12 months to the end of May came to 11.9 percent.
For the seventh time this year the Central Bank has lowered the monetary policy rate from 3% to 2.25%, and projected that inflation at the end of the year will be close to 0%.
Inflation for the first seven months was 4.73%, due to price rises in food, drinks, transport and services.
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