After the Central Bank of Costa Rica reduced the Monetary Policy Rate for the second time this year, it is estimated that the effects on the economy will be delayed.
On May 22, the Central Bank of Costa Rica (BCCR) decided to reduce the Monetary Policy Rate from 5% to 4.75%, arguing that the increase in international commodity prices and the redefinition of the basic tax basket could put upward pressure on inflation.
Arguing that the rise in international commodity prices and the redefinition of the basic tax basket could put upward pressure on inflation, the Central Bank reduced the Monetary Policy Rate to 4.75%.
This is the second reduction made by the Central Bank of Costa Rica (BCCR) so far this year, since at the end of March it decided to reduce the monetary policy rate from 5.25% to 5%.
The Effective Rate in Dollars increased from 2.84% to 2.86%, while the Basic Passive Rate decreased, in this case from 6.25% to 6.15%.
The Central Bank of Costa Rica published on Wednesday afternoon May 8 that after a week of rising, the Basic Passive Rate registered a negative variation and will remain at 6.15% until next May 15. [GRAFICA caption="Click to interact with graphic"]
Arguing that the inflation forecast would be around the central value of the target range, in Costa Rica the Central Bank decided to maintain the Monetary Policy Rate at 5%.
The Central Bank defined its long term inflation goal (measured with the year-on-year variation of the Consumer Price Index) in 3%, with a tolerance of ±1 percentage point, the institution reported.
The Basic Passive Rate increased from 6.05% to 6.15%, while the Effective Rate in Dollars also rose from 2.69% to 2.73%.
The Central Bank of Costa Rica published the afternoon of Wednesday April 24 that after registering a decrease the previous week, the Basic Passive Rate increased by 0.10%, and will remain at 6.15% until next Wednesday, May 1. [GRAFICA caption="Click to interact with graph"]
The Basic Passive Rate decreased from 6.20% to 6.05%, while the Effective Rate in Dollars also decreased, from 2.88% to 2.69%.
The Central Bank of Costa Rica published on Wednesday afternoon April 17 that after recording an increase the previous week, the Basic Passive Rate fell by 0.15%, and will remain at 6.05% until next Wednesday April 24.
The basic passive rate is an average of the collection rates in colones of financial institutions in terms of 150 to 210 days.
In Costa Rica, the exchange rate of the U.S. dollar against the Colon began to rise in April, but from the 3rd to date, a fall of up to 12 colones per dollar has been reported.
After the average exchange rate against the dollar in the Monex wholesale market increased from ¢599.2 to ¢607.9 between March 29 and April 3, there have been continuous declines in the last few days, since as of this month's 17th it decreased to ¢595.8, one of the lowest levels of the year.
The Effective Rate in Dollars increased from 2.63% to 2.88%, while the Basic Passive Rate also increased, in this case from 6.10% to 6.20%.
The Central Bank of Costa Rica published on Wednesday afternoon April 10 that after a week of decline, the Basic Passive Rate registered a positive variation and will remain at 6.20% until next April 17. [GRAFICA caption="Click to interact with graphic"]
The Effective Rate in Dollars decreased from 2.71% to 2.63%, while the Basic Passive Rate decreased from 6.20% to 6.10%.
The Central Bank of Costa Rica published on Wednesday afternoon April 3 that after the 0.05% rise a week ago, the Basic Passive Rate registered a drop of 0.10% and will remain at 6.10% until next April 10. [GRAFICA caption="Click to interact with the graphic"]
Arguing that there are factors that could push inflation down, in Costa Rica the Central Bank decided to reduce the monetary policy rate from 5.25% to 5%.
The inflation forecast models of the Central Bank suggest that this would converge to the target range from the second quarter of 2019 and would remain around or below the midpoint of that range during the horizon of the 2019-2020 macroeconomic programming, informed the Central Bank of Costa Rica (BCCR).
The Effective Rate in Dollars increased from 2.72% to 2.77%, while the Basic Passive Rate decreased from 6.20% to 6.15%.
The Central Bank of Costa Rica published the afternoon of Wednesday March 20 that after a week of rising, the Basic Passive Rate registered a negative variation and will remain at 6.15% until next March 27. [GRAFICA caption="Click to interact with graphic"]
In Costa Rica, the government's strong need for financing and the Central Bank's exchange rate interventions have been putting pressure on the local financial market, pushing up passive rates in Colones.
The decrease in liquidity in Colones generated by the pressure exerted by the government and the Central Bank in the local market is the main reason behind the upward trend in passive rates in local currency.
Between May and September 2018, an increase was reported in the proportion of loans with payment arrears greater than 90 days, but between October and December the trend was downwards.
Data from the General Superintendence of Financial Entities (Sugef) indicate that between September and December 2018, the proportion of loans with payment arrears greater than 90 days, or in judicial collection, decreased from 2.58% to 2.14%.
Arguing that inflation expectations are within the target range, in Costa Rica the Central Bank decided to keep the monetary policy rate unchanged.
The last increase in the monetary policy rate was made in early November 2018, when the Central Bank of Costa Rica (BCCR) decided to raise it from 5% to 5.25%, arguing that forecasts suggest that inflation in 2019 could be above the upper limit of the target range.
The Basic Passive Rate increased from 6.10% to 6.25%, while the Effective Rate in Dollars slightly increased, from 2.80% to 2.81%.
The Central Bank of Costa Rica published on Wednesday afternoon February 27 that after registering a 0.10% decrease the previous week, the Basic Passive Rate increased by 0.15%, and will remain at 6.25% until next March 6.