Research backed by the export sector concludes that in order to reach the breakeven point, the colon needs to devalue by 20% against the dollar within three years.
Analysis by the economist and former bank manager Gerardo Corrales suggests that the exchange rate needs to depreciate by 20% in order to reach its "real" value and balance.To avoid the effect of a sudden devaluation it has been proposed that the increase be done gradually by the Central Bank.
Arguing an attempt to control credit growth in dollars, the Central Bank will apply a reserve limit of 15% to banks that receive lines of foreign funding in that currency.
The banking sector has opposed the measure, asserting that it will result in an increase in the cost of credit in dollars, affecting the business sector, especially exporters and importers who normally resort to credit lines in dollars to finance their operations abroad.
Starting from May companies will be able to use intellectual property rights, crops or inventories as collateral for bank loans.
The law which goes into effect on May 20 allows accounts receivable, movable property (except vehicles), stocks, crops, inventories of merchandise and commercial patents to be used as collateral for loans.
The bank BAC San José de Costa Rica has issued $210 million at a 7-year term securitizing the flow of deposits received from abroad in corporate accounts in the form of remittances or payments for exports or imports.
Although the bank did not specify the interest rate for the issue, Gerardo Corrales, general manager of the company, told Elfinancierocr.com that "... it is a fixed return."
Businesses will receive 2% less from the banks for payments made by customers using credit and debit cards, by way of advance payment of income tax.
A decision by the Directorate General of Taxation, published in La Gaceta says that banks must start making a deduction of 2% of the amount which corresponds to the business on card payments received from October 1.
The scare liquidity of colones explains the lower growth of loans in this currency, while credit growth in dollars continues to lose strength.
Added to the diminished liquidity in colones putting downward pressure on credit growth in that currency, is uncertainty at enterprise-level over recent changes in the exchange rate and lower credit demand for real estate projects, power generation and tourism, as explained by bankers to Nacion.com.
The discretionality of interventions made by the central bank in the foreign exchange market could open the gate for unjust enrichment of those who have inside information.
In the best of democratic worlds, the intervention of public employees in the economy generates income transfers between the sectors within the economy, according to state policies that are largely accepted by the population.
The bank, owned by Colombia's Grupo Aval has bought Grupo Financiero, which includes Banco Reformador in Guatemala and Transcom Bank Limited of Barbados.
The only thing now pending is approval of this transaction by the financial market's supervisory authorities in the country. According to the general manager of BAC San José in Costa Rica, Gerardo Corrales, the intention of this purchase is to strengthen corporate banking in the Guatemalan market.
Credit histories of businesses and individuals will be more thoroughly reviewed, as well as their actual repayment capacity.
"We want entities to analyze peoples's debts with everyone, because they may have a loan here and there, and in the end owe millions," said Javier Cascante, chief of the General Superintendence of Financial Entities (Sugef).
At the Banco de Costa Rica the volume of assets received in lie of payment increased by 70% compared to 2011.
A survey by Elfinancierocr.com between 6 financial institutions, including the four public banks in the country, revealed that in February of this year, there were 1259 properties in their possession, in contrast to the 884 properties that were reported in the same period 2012, ie there was a 42% increase.
The two business associations that claim to represent the sector in Costa Rica are at odds over the fate of the $31 million held by the savings insurance fund.
Against the backdrop of a long-standing confrontation between the Costa Rican Banking Association (ABC), established in 1983, and the Chamber of Banking and Financial Institutions (CBF), founded in 1968, over which of the two unions represent the banking sector in Costa Rica, the Bill on Savings Insurance Act is giving rise to discussions that include charges of "unfair union practices."
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