The scheme that the Central Bank of Costa Rica will implement in order to have control over inflation will bring greater flexibility for the exchange rate.
In line with the scheme adopted in 2005 to control the growth of prices, the Central Bank has now decided to grant more flexibility to the inflation targeting system, which "... means that all of the monetary authority's policies will be aimed at achieving this goal, even theexchange rate."The nominal anchor is the inflation target, instead of a monetary aggregate or an exchange rate," explained Róger Madrigal, director of the Economic Division at the Central Bank."
In the first quarter, GDP recorded a year-on-year increase of 5%, driven mainly by the performance of agricultural and manufacturing production.
From the report "Economic Pulse June 2017" by the Central Bank:
- As of June 8, 2017, the balance of credit to the private sector was L253,360.9 million. The balance of credit to the private sector was L253,360.9 million (48.1% of GDP) as of June 8, reporting a year on year increase of L21,330.3 million (9.2%).The behavior was mainly derived by an increase in national currency of L20,558.4 million (12.9%); Also, in foreign currency the increase was L771.9 million (1.1%).
The Central Bank is not ruling out intervening in the exchange market when it considers that the movement of the dollar against the Colon could jeopardize keeping inflation under control.
At a time when exporting companies insist on giving more flexibility to the exchange rate in order to favor a devaluation to improve their competitiveness abroad, the central bank is standing firm in its position to intervene in the exchange rate when necessary to maintain stable inflation.
Recognition is given to the efforts made in the fight against corruption and the resilience of the economy in the face of the political crisis in 2015, but it was noted that there are still vulnerabilities in the financial system.
From the report Article IV by the International Monetary Fund:
This note summarizes the findings and preliminary recommendations of the mission that visited Guatemala from May 18 to May 31 for the Article IV Consultation 2016. The mission wishes to thank the Guatemalan authorities for their outstanding cooperation and frank dialogue.
The Central Bank believes that there is a high probability that in the coming quarters the Costa Rican economy will still register low inflation rates.
From a statement issued by the Central Bank of Costa Rica:
The Board of the Central Bank of Costa Rica has kept the monetary policy rate at 3.0% a year.
In the 5700-2015 session of 16 September 2015, the Board of the Central Bank analyzed the economic situation of the country and, based on its authority, kept the level of the monetary policy rate (MPR) at 3.0% a year. This decision was taken in a macroeconomic context where the following stands out:
The Central Bank has raised economic growth projections for this year from 3% to 3.5% and revised down the inflation expectations from 5.5% to 4.75%.
From a statement issued by Banco Central de Honduras:
The Central Bank of Honduras (BCH) in fulfilling its tasks approved; in February 2015, the Monetary Programme 2015-2016 (PM), in which it estalished the monetary policy measures to be implemented in the stated period, in order to ensure the maintenance of the internal and external value of the national currency.
The Central Bank has confirmed the widespread perception of economic slowdown, with growth forecast for this year falling from 3.4% to 2.8%.
The president of the organization confirmed that an excess of dollars in the foreign exchange market explains the behavior of the exchange rate, which has remained relatively low and stable in recent months.
From a statement issued by the Central Bank of Costa Rica:
In its review of the macroeconomic program for 2014-2015, the Central Bank projects, as the most likely scenario, an annual inflation of around 6% at the end of 2014, and slightly less than 5% by the end of 2015.
The document issued by the Board of the Central Bank of Costa Rica places emphasis on keeping the inflation target at "4% with a tolerance of ± 1 percentage point for the remainder of the period from 2014 to 2015."
A recommendation has been made that there be greater exchange rate flexibility within the current regime which would strengthen the external position and alleviate the costs of fiscal adjustment.
From a press release issued by the International Monetary Fund:
On June 9, 2014 the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Honduras.
The Central Bank has lowered its inflation forecast to 4% for 2014 and projects increases in interest rates in colones and dollars.
From a Communiqué from the Central Bank of Costa Rica:
The Board of the Central Bank of Costa Rica, in Article 4 of the 5633-2014 session of January 29, 2014 approved the 2014-15 macroeconomic program.
This program is intended to inform the public on the performance of key macroeconomic variables during 2013, as well as the goals, policy measures, assumptions and projections for the next two years, consistent with the priorities and subsidiaries assigned in Article 2 of the Organic Law (Law 7558).
During 2013 the Guatemalan economy continued to recover and show dynamism in most sectors in the country.
The Monetary Authority of Guatemala notes that in 2013 the country had a satisfactory rate of economic activity consistent with the recovery that has been seen in the world economy.
The entity predicts a robust 2014 with a strengthening of economic activity domestically, mainly driven by an acceleration in world trade, in which Guatemala is immersed.
Representatives of business associations have proposed ten measures to prevent the entry of speculative capital into the country and to provide flexibility to the exchange rate without local currency appreciating.
Elfinancierocr.com reports that "Business representatives this afternoon delivered a plan with 10 steps to curb the heavy influx of foreign capital", among which was "a tax on speculative capital inflows, in addition to promoting a specific tax on remittances sent abroad, of 5% for national banks and 5% for ‘suitcase’ banks".
The Foundation for the Development of Guatemala has analyzed the main economic indicators of the country, and the main variables affecting the exchange rate, inflation and the CPI.
ECONOMIC BULLETIN NOVEMBER 2012
Monthly report of the main indicators of the national economy
Inflation up slightly in October
During the first ten months of the year (January-October), the country registered inflation of 2.90%, while the inter annual variation* of the Consumer Price Index (CPI) was 3.35%, down by 3.3 percentage points compared to October last year (6.65%), marking the second month of increases after eight consecutive months of declines (see chart 1). Meanwhile, the monthly variation was 0.03%, 0.07 percentage points higher than in the same month of 2011 when it reached 0.07%. The annual variation figure is below the range of the inflation target set by the Monetary Board for 2012, of between 3.5% and 5.5%.
The difference between nominal rates paid for loans in local currency and inflation is reaching levels not seen for the past 9 years.
Investors are happy with the situation, which means that their securities in colones are giving them good returns, but for entrepreneurs who need credit for their business or to develop new initiatives, concern is growing.
Experts agree that 2012 will be a year of slight growth, low inflation and devaluation.
The 30 economists consulted by the weekly publication El Financiero, forecast a GDP growth of around 3.3%, mainly driven by construction and trade sectors through domestic consumption. Interest rates will remain at levels similar to 2011, while the exchange rate could vary between 3 and 6%, reaching between 520 and 540 colones to the dollar at the end of 2012.