Costa Rica's economy-watchers see more inflation on the horizon and the consensus is that it may hit 12.6 percent per year, with interest rates following suit, according to a survey taken by the Central Bank.
In the last few weeks interest rates have moved sharply higher, reversing a downtrend that had been in place until April of this year.
Even with present interest rates, the real rate of return on bonds is negative after taking inflation into account.
The Central Bank is struggling to maintain the current exchange rate because if it goes down it could trigger yet another round of higher prices in the local currency.
The passive low base rate falls for the second consecutive week, from 7.50% to 6.75%.
Two weeks ago it temporarily located at 8.25%, showing the vulnerability of the indicator and transient conditions of liquidity as well as sector-specific needs, with the aggravation that this rate is used as the main reference for credit grants, so it has direct effect on financial planning for many businesses and families.
Since late December last year, the Central Bank of Costa Rica has applied a new methodology for calculating the passive base rate.
From the website of the Central Bank of Costa Rica (BCCR):
Passive Base Rate
The base rate is a weighted average of the interest rates in colones on gross collections by financial intermediaries negotiated by domestic residents and the interest rates for deposit instruments of the Central Bank and Ministry of Finance negotiated both in the primary and secondary market, each corresponding to periods of between 150 and 210 days.
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