Interest Rate Volatility in Costa Rica

The basic passive rate, the main interest rate indicator, has experienced far too much volatility during 2010.

Monday, January 3, 2011


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This rate recently dropped 50 basis points (0.5%) to 7.25%, emphasizing its excessive volatility through 2010.

In its most recent report on price increases, the Central Bank of Costa Rica noted that these changes are caused by large transactions executed by some banks with state entities under preferential rates.

This implies a considerable problem in how the rate is calculated, as the indicator should reflect macroeconomic changes in inflation, economic activity and credit, and not be so vulnerable to specific transactions.

More on this topic

Costa Rica: TBP Drops to 6.65%

May 2013

The Central Bank of Costa Rica has reported that as of May 30, the base rate will drop 0.5% after remaining for three consecutive weeks at 6.70%.

This is the lowest percentage achieved in the last four and a half years, in which the lowest rate was 6.75%.

"The reduction was due in part to a decrease in average deposit rates at public commercial banks, which went from 6.11% to 6.08% and these entities have the most weight in this calculation", reported Elfinancierocr.com.

Costa Rica: Base Rate Remains at 6.95%

April 2013

From the 4th and at until April 10th, the passive base rate will remain at 6.95%, after more than three months of continuous decline.

"... The trend has been downward since October, when it began to decline after reaching the highest point in the last three years of 11%," reported Elfinancierocr.com.

Costa Rica: Base Rate Drops to 7.80%

February 2013

Starting tomorrow the base borrowing rate of the Central Bank of Costa Rica, will be at 7.80%, the lowest level in more than two years.

Nacion.com reports that "This figure is a quarter percentage point below the level of last week, when the indicator was 8.05%."

This week’s calculation was influenced by decreases in the savings rates of commercial banks (public and private) and mutual savings and loans.

Base Rate drops to 8.3% in Costa Rica

January 2013

Starting tomorrow, Thursday, January 31, the passive base rate will fall to 8.3%, after 7 days at 8.6%.

The passive base rate (PBR) is an average of the deposit rates of banks and financial institutions on maturities of between 150-210 days.

It is an important indicator for the Costa Rican economy, as there is a significant amount of lending tied to this rate.

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