Costa Rican inflation puts pressure on interest rates

Costa Rica's inflation in May was 1.91 percentage points higher than in April, raising fears over the future for interest rates. Inflation for the 12 months to the end of May came to 11.9 percent.

Wednesday, June 4, 2008

The central bank has set a target of achieving positive interest rates in real terms, but the longer it takes to reach that objective, the higher will inflation become, analysts say.
"The danger that we see is that if the central bank fails to speed up the increases in interest rates, the situation could get worse," said Eric Vargas, a financial analyst of Grupo Aldesa.

More on this topic

Costa Rica: Monetary Policy Rate Rises to 2.25%

April 2017

Arguing the existence of additional pressures on inflation, the Central Bank has raised the monetary policy rate to 2.25%, a rate which has stood at 1.75% since January 2016.

From a statement issued by the Central Bank:

The Board of Directors of the Central Bank of Costa Rica established, in article 7 of the minutes of the 5765-2017 session of April 5, 2017, unanimously and firmly, the following:

Costa Rica: Monetary Policy Rate Drops to 2.25%

October 2015

For the seventh time this year the Central Bank has lowered the monetary policy rate from 3% to 2.25%, and projected that inflation at the end of the year will be close to 0%.

The Board of the Central Bank of Costa Rica also decided to set the gross interest rate for overnight deposits (DON) at 0.95% as of October 21.

Costa Rica: Macroeconomic Program 2014-2015

January 2014

The Central Bank has lowered its inflation forecast to 4% for 2014 and projects increases in interest rates in colones and dollars.

From a Communiqué from the Central Bank of Costa Rica:

The Board of the Central Bank of Costa Rica, in Article 4 of the 5633-2014 session of January 29, 2014 approved the 2014-15 macroeconomic program.

Costa Rica's June inflation rises to 6.55%

July 2008

The rise in food and fuel prices on international markets continues to spur inflationary expectations in Costa Rica. These concerns were first expressed by the Central Bank early in the year.

In June, the annual rate of inflation stood at 6.55 percent.
Not everyone is prepared to blame oil and food prices as the main culprit in the latest round of inflation.

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