With a drop of 0.15 percentage points the passive base rate (TBP by its initials in Spanish) is located as of this March 14 at 7.10%.
This new adjustment to the indicator is in line with the downward trend seen since late December 2012.
"This is the twelfth consecutive TBP adjustment since 27 December. Just before that date, the indicator was 9.5%, therefore, in two and a half months it has lost 2.4 percentage points", noted an article in Elfinancierocr.com
The basic passive rate will be located from 7 March at 7.25%, the lowest in the past 18 months, after having reached 11% earlier in October.
Gabriel Alpizar, financial risk manager at the Bank of Costa Rica, said that "the main reason for the fall of the base rate lies in the fact that there is an abundant liquidity in colones which the central bank has made in recent months, adjusting this macroprice which is fundamental to our economy", noted an article in Crhoy.com.
Four months after being at 11%, the base rate, an indicator of great importance for Costa Ricans, is declining.
From the Blog Pulso Bursátil by Aldesa:
Four months after being at 11%, the base rate, an indicator of great importance for Costa Ricans, continues to fall and is currently at 7.35%.
This was announced today by the Central Bank, the entity that calculates the average of savings rates offered by financial institutions for periods of 150-210 days.
If they managed to get down the passive base rate down from 11% to 7.50% in just four months, why wasn't it done before?
Editorial
There are a lot of companies and individuals who every month have to make loan repayments that are tied to the passive base rate (TBP by its initials in Spanish), and of these, the indicator's rise to 11% led to the bankruptcy or foreclosure for quite a few.
The passive base rate continues its downward trend this week standing at 7.50%.
Banco Central de Costa Rica reported that the passive base rate (TBP by its initials in Spanish) fell by 0.3% and will be located from Thursday 21 February at 7.5%.
As of Thursday 7 February, the passive base rate is located at 8,05%, continuing the downward trend which begun on December 27.
Elfinancierocr.com reports that "Economists project the continuation of the decline and that it will approach levels of between 7% and 7.5%."
"The Executive and the Central Bank of Costa Rica have announced intentions and measures in the next few weeks to lower local interest rates which, because of their level, are attracting capital from foreign investors who taking advantage of the differential with respect to the returns they could get in other places. "
There has been a decrease for the fifth consecutive week of the base borrowing rate by the Central Bank of Costa Rica, settling at 8.6% today.
This indicator is a weighted average of the interest rates in colones on gross collections, by financial intermediaries negotiated by domestic residents and the interest rates of deposit instruments of the Central Bank and Ministry of Finance negotiated both in the primary and secondary market, each corresponding to periods of between 150 and 210 days.
According to an article in Elfinancierocr.com, the meeting held on Monday 14 January is part of a consultation strategy that President Chinchilla is conducting in order to find the best way to control speculative capital inflows.
For the third consecutive week the Central Bank of Costa Rica’s basic borrowing rate has fallen, now standing at 9.05%.
This indicator is a weighted average of the interest rates of gross deposits in colones, negotiated by resident financial intermediaries, and the interest rates of deposit instruments of the Central Bank and Ministry of Finance, negotiated both in the primary and secondary markets, each corresponding to periods of between 150 and 210 days.
Costa Rican financial institutions are questioning the exclusion of the Treasury and the Central Bank in the new base rate calculation.
The Costa Rican Banking Association (ABC in Spanish) has questioned the exclusion of the Ministry of the Treasury and the Central Bank, as it asserts that with the change a large part of the country's financial system is being excluded.
The reduction is significant and moves the indicator away from the 11% reached just two months ago, but is still two percentage points above its November 2011 level.
From the Blog Pulso Bursátil by Aldesa:
The base rate fell again today, closing at 9.50%, according to the Central Bank of Costa Rica, which calculates the indicator.
After a warning by President Chinchilla to state commercial banks, the financial entities involved have put their interest rates on a diet.
The passive base rate, an index calculated by the Central Bank of Costa Rica (BCCR), is a weighted average of the interest rates in colones on gross savings, negotiated by financial intermediaries resident in the country and the interest rates of collection instruments of the Central Bank and Ministry of Finance negotiated both in the primary and secondary market, each corresponding to periods of between 150 and 210 days.
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