Costa Rica's cutbacks in debt draw criticism

The plan of the Finance Ministry to issue fewer bonds and the way in which they will enter the market hasn't gone down well with private players in the financial sector.

Monday, July 14, 2008

It's a classic confrontation, with the private financial institutions wanting to see more liquidity and the government taking steps to control inflation.
The critics are unhappy with the lack of government bodies that issue new products in the primary markets, and worry about its pessimistic forecast about the national economy.
"I think there's a lack of vision by the decision-makers to provide more liquidity in the secondary market," said Danilo Montero, manager of Grupo Interbolsa.

More on this topic

ICE Looks to International Markets

November 2011

Costa Rica's state-owned electricity and telephone services supplier (ICE) has decided to finance its future capital expansion projects with an international debt issuance.

Aldesa's analysis of ICE's decision comments that the company is looking to make the most of the joint conditions of low dollar interest rates and a lack of this kind of opportunity for investors.

Costa Rica: Basic Rate down to 6.75%

October 2010

The passive low base rate falls for the second consecutive week, from 7.50% to 6.75%.

Two weeks ago it temporarily located at 8.25%, showing the vulnerability of the indicator and transient conditions of liquidity as well as sector-specific needs, with the aggravation that this rate is used as the main reference for credit grants, so it has direct effect on financial planning for many businesses and families.

Guatemalan Bond Issue Raises Alarms

May 2010

Experts foresee increased interest rates, exchange rate variations, liquidity issues, domestic credit shortages and more inflation.

Investors would be drawn to the superior interest rates paid by government securities, taking money out of the market and into the State Treasury, limiting the capacity of banks to lend to private companies.

Costa Rica: Investment Guide 2009

April 2009

If we are to maintain growth and profitability in our portfolios, we should be much more aggressive in the types of instruments for investment.

The worst enemy of investment is inflation. In Costa Rica, this variable has increased significantly. According to estimates by the World Bank, it will remain one of the highest in the region.

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