Costa Rica's Central Bank raises interest rates to 8%

The short term interest rate, which is used by the Central Bank to influence the market, rose 100 basis points Thursday to eight percent.

Friday, June 20, 2008

The rate jump was made possible by movements the currency has undergone since it began a limited float.
It allows more freedom for the Central Bank to manage interest rates as an instrument of monetary policy without having to buy dollars.
Now the bank can return to its monetary policy of trying to reduce inflationary pressures.
The value of the colón has fallen as a result of changes in investor expectations from a possible rise to a likely decline, analysts said.
The interest rate increase is an effort to narrow the spread between currencies, which has been broad and arbitrary.

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Costa Rica: New Monetary Policy Rate

June 2011

The Central Bank of Costa Rica has announced a new monetary policy rate adjusted to a value of 5%, as part of a new system of monetary control.

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Central Bank of Costa Rica increases rates

October 2008

The BCCR increased interest rates for electronic deposits in colones acquired over the internet.

Gross interest rate (which includes the 8% tax) for 30 day deposits increased from 5.43% to 6.0%.
Mean while, for 360 day deposits (The rate went up to 12.28%). The increase in rates for deposits at the Central Bank, as well as the adjustments being implemented by other financial institutions, cause the basic passive rate to continue to rise.

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