Credit Does Not Rebound, Even With Lower Rates

Although The Central Bank has been reducing the monetary policy rate to boost the issuance of bank credit, the speed with which the portfolio of loans in national currency grows continues to decrease.

Wednesday, November 27, 2019

Official data from the country's financial system indicate that by October 2017 the portfolio of loans in local currency grew to 14%, in the same month of 2018 the rate fell to 6% and by the tenth month of 2019 the increase was just 4%.

You may be interested in "Expectation for Changes in Monetary Policy"

This significant slowdown in the issuance of loans is reported despite the fact that during 2019 the Central Bank of Costa Rica (BCCR) has lowered the Monetary Policy Rate six times, from 5.25% to 3.25%. reviews that "... This year growth has dropped steadily since April, that is, has seven months to slow down the pace. While some portfolios show very slight improvement (industry and transport), portfolios associated with consumption do not. The balances of consumer loans, housing, trade, tourism and construction, remain slow."

Not everything is adverse to banks, because according to Juan Manuel Jiménez, manager of Business Banking Promerica, "... The slowdown in the supply of credit in the state banking segment has caused some customers to start a migration to private banking, generating this possibility of issuance and portfolio growth."

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