Honduras: keeping rates unchanged as prices rise
Honduras Central Bank President Edwin Araque said he favors keeping the benchmark lending rate unchanged throughout the year on optimism steps taken to limit an expansion in credit will help slow inflation.
Sunday, April 13, 2008
The Tegucigalpa, Honduras-based Banco Central kept the benchmark rate at 7.75 percent on March 27 and asked commercial lenders to set aside more of their deposits at the bank. The higher reserve requirements are enough to help bring inflation within its official target for 2008, Araque said.
The Central Bank has reduced the benchmark rate by 50 basis points as a result of stable performance shown by the economy.
The Central Bank of Costa Rica has suggested creating a benchmark rate for dollars, similar to passive base rate applied to the local currency, the Colón.
The Central Bank of Honduras has reduced the monetary policy rate by 0.25%, setting it at 6.75%, which has created the expectation of lower interest rates in the domestic market.
In order to sustain the pace of local economic growth, the Central Bank has decided to reduce the monetary policy rate from 6.75% to 6.50%.
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