This rate is used as a reference for loans in the local currency; hence an increase in the passive rate is a stimulus for savers.
This also means that loans in colones that are indexed to this rate will most likely be adjusted to reflect the rise, and that borrowers will probably have to pay a little more for loans at the banks. As a result, monthly payments for loans set at a variable rate on the passive interest rate will be higher.
For the fifth time this year, Costa Rica's interest rates are heading higher.
The latest adjustment reflects the fact that most financial institutions have raised their interest rates paid for savings in colons. As recently as April 16 the rate was just 4.25 percent.
This means that indexed credits in colons at this rate will probably be raised and borrowers wil have to pay a bit more.
Taking into account inflation expectations, the Monetary Board has increased the leading interest rate by 0.25% , going from 5% to 5.25%.
From a press release issued by the Bank of Guatemala (Banguat):
The Monetary Board in its meeting today, after learning the balance of inflation risks, based on comprehensive analysis of the external and internal situation, has decided to raise the level of the monetary policy leading interest rate by 25 base points, going from 5.00% to 5.25%.
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