In Costa Rica, a law initiative under discussion seeks to set caps on interest rates on loans, a measure that could lead to a reduction in the offer of credit for debtors classified as higher risk.
As part of a bill being discussed in the Legislative Assembly, the heads of the Central Bank of Costa Rica (BCCR) and the General Superintendence of Financial Entities (Sugef) were asked to give their views on the content of the proposal.
During 2019, the price of the dollar in Costa Rica registered multiple fluctuations; however, for this 2020, such abrupt variations are not anticipated, since the Central Bank starts the year with reserves close to $9 billion.
Data from the Central Bank of Costa Rica (BCCR) show that between February 4 and November 28, 2019, the average dollar price in the Costa Rican market fluctuated considerably, ranging from ₡614.31 to ₡562.63.
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.
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%.
With the aim of cushioning the fall in the price of the dollar, which between November 5 and 25 was reduced in ₡18,35, in just two days the Central Bank intervened buying more than $30 million.
Of the $41.5 million negotiated at Monex during the November 22 session, the Central Bank of Costa Rica (BCCR) purchased $36 million, and of the $30.7 million negotiated on November 25, the monetary authority acquired $27 million.
Because of the growing supply of dollars in the local market, which is explained in part by the income of $1.5 billion from the recent issue of Eurobonds, so far in November the price per dollar in the wholesale market has been reduced at ₡16,55.
Official figures from the Central Bank of Costa Rica (BCCR) report a downward trend in recent weeks, as between November 5 and 22 the price has dropped from ₡585,52 to ₡568,97, equivalent to a 3% variation. See full figures.
After year-on-year variations of 1.4% and 1.6%, respectively, will be reported in Costa Rica in July and August, in September the IMAE grew 2%, again explained by the performance of the special regimes manufacturing sector.
The growth of the Monthly Economic Activity Index (IMAE) in August was driven by the production of special regimes (free zone and active perfecting), which grew at a 12% year-on-year rate, according to information from the Central Bank of Costa Rica.
Because of the country's economic situation, between 2017 and 2018 there was a 2% drop in the number of Costa Ricans who left from Juan Santamaria Airport and 4% in total expenditures abroad.
Aeris Costa Rica figures detail that between 2017 and 2018 the number of national departures from Juan Santamaria Airport went from 793,000 to 780,000. Regarding 2019 data, up to September the figure reaches 579,000.
Although the downward adjustments made months ago in the bank reserve and monetary policy rate do not yet appear to have had an effect on the loan portfolio in Costa Rica, banks expect credit to be reactivated soon.
After the exchange rate closed on August 23 at ₡565,88 per dollar in the wholesale market MONEX, an upward trend has been reported since then, reaching ₡581,33 per dollar on September 5, which could be the result of a lower participation of the Central Bank in the exchange market.
Official figures from the Central Bank of Costa Rica (BCCR) report that between early February and mid-August of this year, there has been a fall of up to 48 colones per dollar, when reporting a drop in the average rate in the wholesale market Monex from ₡613,87 to ₡565,88.
In Costa Rica, the exchange rate closed on Tuesday, August 20th at 565.88 colones per dollar in the wholesale market MONEX, its lowest level since late May last year.
The exchange rate for this Tuesday closed at ₡565.88 in MONEX, its lowest level since late May last year. The current level implies an appreciation of the national currency against the dollar of 7.2% so far this year and -0.6% in the comparison of 12 months.
In Costa Rica, the Central Bank predicted that confidence would again prevail among businessmen and consumers once the tax reform was approved, but that has not been the case.
In December 2018, after a year of proceedings in Congress and after having been reviewed in the constitutional instance, was approved by the Assembly of the country the file that corresponded to the Law of Strengthening Public Finances.
In Costa Rica, it is expected that the downward trend that has been showing the exchange rate since February will intensify in the coming months, when the $3.580 million begins to enter as a result of the issuance of Eurobonds and loans granted by external entities.
According to data from the Central Bank of Costa Rica (BCCR), between the beginning of February and July 30 of this year, there has been a fall of up to 44 colones per dollar, reporting a drop in the average rate in the wholesale market Monex from ¢613.87 to ¢570.13.
Not considering the costs of the collection process, nor market conditions, are some of the failures that banks identify in the bill being discussed in the Legislative Assembly of Costa Rica.
After last week in Costa Rica the rate rose to 6.65%, a level that had not been recorded since August 2015, on July 10 abruptly decreased to 6%.
Data published by the Central Bank of Costa Rica on Wednesday afternoon, July 10, show that the Basic Passive Rate (PBS) decreased by 0.65%, and will remain at 6% until next July 17.
For the Central Bank of Costa Rica, the projection of growth in production, which for this year is 3.2%, should be reviewed downward, because of the evolution that has shown the economic activity during the first half.
Considering the shocks that have affected national production so far in 2019, it is likely that this year economic growth will be below the 3.2% projected in the 2019-2020 Macroeconomic Program last January, explains the most recent report of the Central Bank of Costa Rica (BCCR).
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