The Central Bank informed that from September 2, the interest rate for one-day loans will be reduced from 6% to 5.5%.
On August 30 the monetary authority of the country informed that "... will induce an additional decrease of the interest rate of the monetary repurchase agreements operations, locating the rate for 1 day repurchase agreements, from 6.0% to 5.5%."
The Central Bank announced that from August 12 it will reduce from 15% to 13% the legal reserve week rate in national currency.
From the Central Bank of Nicaragua statement:
Managua, August 07, 2019. The Central Bank of Nicaragua (BCN) reports that liquidity conditions are observed that favor the support of banking and monetary operations, which represents a change with respect to previous behavior.
Some companies can become richer than others overnight, depending on decisions made by a few public officials.
Editorial
An article in Elfinancierocr.com reports on the positive effects of the devaluation of the national currency of Costa Rica, the-Colón, agains the dollar, for exporters in the country.
The causes of the devaluation were mainly external, but were catalyzed by decisions made by public officials, the Central Bank, whose missive it is to defend the value of the national currency, because this supposedly contributes to the economy.
The Central Bank of Nicaragua has revealed its monetary and financial report for December 2012.
Financial System:
In the month of December the SFN ‘s process of normalization of liquidity continued, which was reflected in the ratio of availability to deposits of 28.1 percent, partly linked to the pace of credit growth which was around 30 percent. Meanwhile, deposits showed a growth of 5.5 percent.
Inflation deceleration and Risks to economic recovery.
The quarterly report from the Executive Secretary of the Central American Monetary Council (SECMCA) focuses on the region's inflation and recovery prospects.
Inflation, measured by year-on-year change in consumer prices, slowed in the second quarter of 2010 to 4.9%, compared to 2.9% in June 2009. This level is within the target limits set by the region's central banks.
The recent increase in the value of the Costa Rican colon versus the dollar is worrisome, not only because there are no clear reasons to explain it, but also because it would be hard to contain it without causing greater problems.
In the past weeks, and without apparent reason, the price of the U.S. dollar in Costa Rica dropped considerably.
Last week we surveyed some financial operators as to why these movements where occurring, the general answer being: “we don’t know”.
As in Orwell’s fable, Central Banks assume the task of deciding who, among equals, “is more equal than others”.
Paul Laurent Solís analyzed the anathema that has become the label “tax haven”, and remarked the role Central Banks have assumed in Central American economies, especially when they become tools for whichever government that happens to be in power.
The Nicaraguan Foundation for Economic and Social Development indicates that the country will need over $2 billion in external aid for the next three years.
The economic crisis has reduced government income in great levels, forcing budget cuts and monetary policy changes, while tapping international reserves.
Erwin Sanchéz, in his article in Elnuevodiario.com.ni, refers to the report by the Nicaraguan Foundation for Economic and Social Development (FUNIDES): "According to the document, the usage of international reserves in levels consistent with the fixed currency exchange rate of Nicaragua, to attend short term difficulties, is valid and logic, as long as the government receives external support, or fiscal measures exist to compensate the problem."
FMI: "Recessions associated with financial crises tend to be severe. Recoveries from such recessions are typically slow."
If such recessions are globally synchronized then they tend to last even longer and be followed by recoveries that are even weaker.
Countercyclical policies can be helpful in ending recessions and strengthening recoveries. In particular, expansionary fiscal policies seem particularly effective.
FMI: "Recessions associated with financial crises tend to be severe. Recoveries from such recessions are typically slow."
If such recessions are globally synchronized then they tend to last even longer and be followed by recoveries that are even weaker.
Countercyclical policies can be helpful in ending recessions and strengthening recoveries. In particular, expansionary fiscal policies seem particularly effective.
In order to reduce the effects of the economic slow down, some politicians are turning to monetary policy or the Central Bank. They believe that by printing more money there will be more wealth, more investment and more employment.
When a Central Bank, such as the US Federal Reserve (FED) or the European Central Bank, increases the amount of money in circulation it is done by reducing interest rates.
Sound fiscal and monetary policy frameworks have underpinned Latin America’s most sustained economic expansion since the 1970s, according to IMF Managing Director Dominique Strauss-Kahn.
Some of the region’s most critical economic achievements include: change in the structure of debt with Brazil eliminating its exposure to foreign currency debt; single digit inflation despite policy transitions; and greater integration into the global economy.