The passive base rate in colones fell from 4.80% to a record low of 4.70%, while the effective tax rate in dollars dropped from 1.98% to 1.91%.
The Central Bank of Costa Rica (BCCR) released late on Wednesday September 21, news that the passive base rate will stand at 4.70%, until Wednesday September 28. This is its lowest value so far this year.
Competition, interbank interest rates and a stable exchange rate are the reasons for the growth of the housing loan portfolio in the first quarter of 2016.
An article on Elfinancierocr.com reports that "... Housing credit has been growing at safe rate since the start of 2016 and this market is expected to remain this way for the rest of the year ...
The deterioration of public finances has forced the offering of a yield of 7.15% at 30 years, 4.44% above the US Treasury bond rate for the same time time period, with offers received for $3.5 billion.
From a statement issued by the Ministry of Finance of Costa Rica:
The Government of the Republic has issued securities in the international financial market worth $1 billion with a 30-year term and a rate of 7,158% a year.
In line with the projections of rising interest rates, the main reference rate for loans and investments has gone up to 7.20%.
After remaining at 7.15% for five consecutive weeks, the base borrowing rate rose by 0.05%, to close at 7.20%, and will stay at this level until at least Wednesday, October 15.
The rate calculated by the Central Bank of Costa Rica, is an average of the rates given for deposits by financial institutions for maturities of between 150 to 210 days.
For the second consecutive week the benchmark interest rate for loans and investments in the country will remain at 7.15% until at least Wednesday 17 September.
The base interest rate indicator calculated by the Central Bank which reflects the average rates given by financial institutions for deposits for periods of 150-210 days will stay at the level of 7.15% for one more week.
The risk premium demanded by investors for the Costa Rican international bond due in 2023 rose from 2.10% to 2.56% between June and September 2014.
Investors could be moving towards a degradation of the sovereign rating of the country, a possibility already suggested by Fitch rating agency.
An article on Nacion.com reports that "... Since last June, the extra rate of return that foreign savers demand for Costa Rican Government's securities in respect to United States Treasuries (so-called risk premium or margin) has gone. "
The main reference rate for loans and investments has risen from 7.10% to 7.15% and will remain at that level until at least September 10th.
Following the upward trend of recent months and reflecting the shortage of liquidity in colones in the local financial system, the base borrowing rate rose to 7.15% this week, according to the Central Bank of Costa Rica, which calculates the indicator.
Continuing its upward trend, of the base rate has risen to 7.10%, and will be located at this level until at least September 3, 2014.
The upward pressure on interest rates in Costa Rica continues and a reflection of this is the increase of the base rate, rising from 7.05% to 7.10%.
This rate is calculated by the Central Bank of Costa Rica and is an indicator of the average uptake rates given by financial institutions on maturities of 150 to 210 days.
For the first time in a year and five months, the benchmark rate for loans and investments in the country has dipped to less than 7%.
The Central Bank of Costa Rica reported that the passive base rate, an indicator of the average uptake rates given by financial institutions on periods of between 150 and 210 days will be located at 7.05% at least until Wednesday 27 August.
On average financial institutions pay fees of 6.6% per annum for deposits in colones in the national financial system.
Although in the financial system, cooperatives offer better returns for deposits than banks, overall rates of these instruments have shown a downward trend in recent years, going from in some cases, as cited by the economist Rudolf Lucke on Nacion.com, "... a rate of up to 15% to current rates of around 6%."
For the second consecutive week the benchmark rate for loans and investments will be located at 7% and will remain at that level at least until August 6.
The Central Bank of Costa Rica has reported that the passive base rate will remain at 7% for another week, until Wednesday 6 August.
The rate is an indicator of the average uptake rates given by financial institutions for maturities of between 150 to 210 days.
The new Central Bank methodology which establishes preferential rates for large public sector deposits could influence other rates in the financial system.
The new methodology implemented by the Central Bank of Costa Rica aims to set benchmarks for public banks to provide preferential rates to state entities, but which "... at the same time, do not have excessive returns so that the market does not feel pressure to up rates. "