The Central Bank of Costa Rica reported that as of May 9 the passive base rate will be set at 6.70%, down 0.05% from the previous week.
"With this reduction, the basic passive rate (TBP) reaches its lowest level since February 2008. At the beginning of this 2013, the indicator was at 9.20%, so it has lost 2.5% in just four months. A year ago, the TBP was by 10%," noted an article in Elfinancierocr.com.
From today the Passive Base Rate (PBR) rises by a quarter point, going from 10.25% to 10.50%, its highest level for almost three years.
The passive base rate is calculated by the Central Bank and is a weighted average of interest rates of savings in colones for periods ranging from 150 days (5 months) to 210 days (7 months).
"The Treasury has argued that the placement of international bonds will eventually reduce upward pressure on domestic interest rates. The reason is that it would lower the Government’s need to raise money, since with the money received it can pay other external and internal debts", reported Elfinancierocr.com
From today the basic passive rate (TBP in Spanish) rose half a percentage point to settle at 8.5%, a level not seen since May 2010.
"The increase was caused by higher deposit rates at state-owned banks, which are the entities that carry the most weight in the definition of the TBP.
According to information from the Central Bank of Costa Rica (BCCR), the banks' average rates rose from 7.83% to 8.39% in a matter of a week", reported Elfinancierocr.com
The passive low base rate falls for the second consecutive week, from 7.50% to 6.75%.
Two weeks ago it temporarily located at 8.25%, showing the vulnerability of the indicator and transient conditions of liquidity as well as sector-specific needs, with the aggravation that this rate is used as the main reference for credit grants, so it has direct effect on financial planning for many businesses and families.
The reference rate for setting interest rates in savings and loans increased by 75 basis points.
With this increase, investors receive better returns and debtors will have to pay more for their loans.
A La Prensa Libre article quotes comments of Pablo Villalobos, monetary and financial statistics head at the Costa Rica Central Bank: "... the competition between banks to capture resources has become tougher in the last two weeks.
The drop of one fourth percentage point is registered after three weeks in which the indicator was stable at 11.25%.
With this reduction, the rate reaches the same level observed in November of 2008.
Édgar Delgado publishes in Elfinancierocr.com: "The behavior of this indicator is important and not just because it provides a sign of what savers are receiving for their investments..."
The decrease came after it had remained stable at 11.50% for the last three weeks.
The above is according what the Central Bank of Costa Rica published.
Edgard Delgado Montoya wrote in the El Financiero website: "The TBP (Base Passive Rate) is an average of the rates collected by financial intermediaries, the Central Bank and the Ministry of Finance, at terms between five and seven months.
Beginning today, the base passive was lowered one quarter-point from 11.75% to 11.50%.
For the second consecutive week, the base passive rate decreased and now sits at 11.50%. However, according to a note by El Financiero Costa Rica, “it has been moving up and down since last October, although with an upward trend."
The base passive rate is calculated by the Central Bank and is a weighted average of interest rates of savings in colones for periods ranging from 150 days (5 months) and 210 days (7 months).
The increase in the passive base rate, valid beggining today, is of 0.25%.
The person in charge of monetary and financial statistics for the Central Bank of Costa Rica, Pablo Villalobos, told la Nacion "that this week’s increase in the base rate was due to some brokers raising their rates and others lowering them, but increases weighed a little more on the average.”
The rise of a half of a percentage point will take place starting today, being the maximum level registered during 2009.
Nacion publishes on its website: "Henry Vargas, an expert in the area of Statistics at the Central Bank, stated that this increase in the base rate has taken place due to commercial banks changing their funding strategy, which consists of getting less from external resources and capturing more within the local market.”
As of today, the basic passive interest rate dropped by a quarter point, from 11.5% to 11.25%.
Nacion.com reports: "The basic passive rate was reduced for the second consecutive week this month.
The basic passive rate is calculated by the Central Bank and is a weighted average of the interest rates for savings in colones for terms of between 150 days (5 months) and 210 days (7 months)."
The half point drop effective from today, is the first for the year after two consecutive increases.
Elfinanciero.com reports: "The Basic Passive Rate is an average of the rates paid for investments by financial entities, the Ministry of Housing, and the Central Bank for terms of 150 and 210 days.
Its behavior is important because its shows the average results gotten by consumers for their savings and deposits."
Starting today and until January 14, the indicator will be at 11.75%, according to the Central Bank.
Elfinancierocr.com reports, "According to the survey on economic perspectives published this week by the EF, most of the economists that were consulted believe that the indicator could reach 12% this year.
As of today, the basic passive rate will go up by 0.50 points to 11.50%, its highest since November 2006.
The basic passive rate is an average of the rates for savings in colones for terms of 150 days (5 months) and 210 days (7 months) and is calculated by the Central Bank.
The Central Bank uses this rate as a reference to control monetary policy and the commercial banks use it as a reference for loans.