This is the third reduction made by the Central Bank of Costa Rica (BCCR) so far this year, since at the end of March it decided to reduce the monetary policy rate from 5.25% to 5% and in May from 5% to 4.75%.

See "Monetary Policy Rate goes Down to 5%" and “Costa Rica: Monetary Policy Rate Falls to 4.75%”.

From the BCCR press release:

San José, June 19, 2019. The Board of Directors of the Central Bank of Costa Rica, in session of June 19, 2019, agreed to reduce the Monetary Policy Rate by 25 basis points, to set it at 4.50% annually. In addition, it agreed to reduce the gross interest rate of overnight deposits (DON) by 19 basis points to 2.66% annually. Both changes will apply from June 20, 2019.

In its decision, the governing body took into account the following considerations:

The Central Bank has as a priority objective to maintain a low and stable inflation, and as one of its subsidiary objectives "to promote the orderly development of the Costa Rican economy, in order to achieve the full occupation of the productive resources of the Nation, trying to avoid or moderate the inflationary or deflationary tendencies that may arise in the monetary and credit market" (article 2 of its Organic Law, Law 7558).

Read full press release (In Spanish).

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