Central Bank Vs. Commercial Banks

For six-month term savings in colones, the Central Bank in Costa Rica is offering a return of 8.10%, a rate that is higher than that available at commercial banks.

Monday, March 5, 2018

Interest rates Costa Rica Al March 27th, 2019  

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In order to attract money from savers in colones in six months terms, the rates currently offered by financial institutions are 8.10% in the case of the Central Bank (Banco Central), 6.85% at Banco Nacional, 6.75% at Banco de Costa Rica and 6.40% in Promérica. 

In the current scenario, the Central Bank is offering better yields, despite being the entity with the lowest risk. Regarding the possible consequences of this situation, Scotiabank treasury director, Mario Vásquez, explained to Nacion.com that " ... if banks must face higher collection costs, the higher interest rates paid on long term deposits translate into higher rates charged in credit operations and that could ultimately affect the cost of credit."

See graph of the behavior of the Passive Base Rate: Click to interact with graphClick to interact with graph

In relation to the variations of the rates and the shares of the Central Bank, the Treasury manager of the Bank of Costa Rica, Luis Diego Moya, stated that " ...'Theoretically, the Central Bank is an issuer with low risk, however, the interest rate adjustments promoted by the Central Bank have been extremely aggressive in recent months, which from our point of view, means it is not appropriate to equate it due to the effect it has on the financial cost, considering also that the active and reference rates, especially the passive base rate, do not adjust at the same rate due to their calculation methodology."

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More on this topic

Local Currency Shortage Pushes Interest Rates Up

March 2019

In Costa Rica, the government's strong need for financing and the Central Bank's exchange rate interventions have been putting pressure on the local financial market, pushing up passive rates in Colones.

The decrease in liquidity in Colones generated by the pressure exerted by the government and the Central Bank in the local market is the main reason behind the upward trend in passive rates in local currency.

Interest Rates Increase in Costa Rica

January 2019

The Basic Passive Rate increased from 6% to 6.05%, while the Effective Rate in Dollars went up from 2.52% to 2.57%.

The Central Bank of Costa Rica published on January 9 that after not registering variations last week, the Basic Passive Rate increased 0.05%, and the level at which it will remain until next Wednesday, January 16 is 6.05%.

Interest Rates Drop in Costa Rica

September 2017

The Passive Base Rate fell from 5.95% to 5.75%, while the Effective Rate in Dollars also decreased, going from 2.21% to 2.07%.

The Central Bank of Costa Rica published on the afternoon of Wednesday, September 6, news that after a rise last week, the Passive Base Rate registered a reduction, and will remain at 5.75% until next Wednesday, September 13. [GRAPHIC caption = "Click to interact with the graph"]

Costa Rica: Passive Base Rate Remains at 6.7%

April 2014

For the fourth consecutive week the benchmark for interest rates on investments and loans remains unchanged until May 7.

The Central Bank of Costa Rica reported that the passive base rate, an indicator of the average savings rates given by financial institutions on terms of 150 to 210 days will remain at 6.70% at least until May 7.

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