Moody's downgraded the long-term issuer ratings and the Costa Rican government's unsecured bonds.
Yesterday the risk rating agency reported that expectations of a continued decline in fiscal indicators and evidence of increased financing needs are some of the reasons behind the decision to revise the country's debt rating.
Rocio Aguilar, Finance Minister, explained to Crhoy.com that Moody's warning is "...
The Passive Basic Rate decreased from 5.80% to 5.75%, while the Effective Rate in Dollars also decreased, from 2.43% to 2.21%.
On Wednesday afternoon, October 18th, the Central Bank of Costa Rica published that after not recording a movement in the previous week, the Basic Passive Rate decreased by 0.05%, and will remain at 5.75% until next Wednesday, October 25th. [GRAFICA caption="Click to interact with the graph"]
The upward trend in recent weeks in the dollar's price against the Colon has slowed.
According to figures from the Central Bank (BCCR), the exchange rate on the Monex wholesale market increased between August 17th and October 11th, from ¢568.35 to ¢597.43 per dollar, equivalent to a depreciation of 5.12%.
However, the constant depreciation registered by the Colon started to be contained at the end of last week, since on October 12th the weighted average in the Monex wholesale market was ¢595.41. The BCCR reported yesterday that the exchange rate dropped to ¢594.56 and today to ¢594.24.
In Costa Rica a law proposal pretends to reduce by 50% the bank fees on loans for businesses and SMEs, as well as credits for social housing and lower class.
The law project, which was presented to the Congress by the representative, Yorleny Leon, aims to reduce fees in the formalization of bank loans, which currently range between 8% and 10% of total credit.
Mortgage and personal loans continue to determine a significant part of the 5% increase in domestic credit to the private sector, recorded between July 2017 and the same month in 2018.
More recent data from the Superintendence of Banks, up to the seventh month of the year the credit portfolio of the private sector reached $52,607 million, which is equivalent to an increase of 5.4% with respect to the $49,921 million reported up to July 2017.
During this year, the Central Bank of Costa Rica has had to spend $1.1 billion of its reserves to participate in the exchange market and counteract the upward trend in the dollar price with respect to the Colon.
According to figures from the Central Bank of Costa Rica (BCCR), from August 17 to October 12 the exchange rate in the wholesale market Monex has been increasing, going from ¢568.35 to ¢595.46 per dollar, which is equivalent to a depreciation of 4.76%. [GRAFICA caption="Click to interact with the graph"]
The Costa Rican currency continues to depreciate, and the exchange rate in some Banks was already 600 Colones and more per dollar.
The upward trend of the exchange rate in Costa Rica has been observed in recent days. The Central Bank estimates that between September 27 and October 11, the exchange rate in the wholesale market Monex reported a clear upward trend, which is reflected in the increase from ¢570.75 to ¢597.43 per dollar, equivalent to a depreciation of 4.67%. [GRAFICA caption="Click to interact with graphic"]
The Effective Rate in Dollars increased from 2.40% to 2.43%, while the Basic Passive Rate continued for the second week at 5.8%.
The Central Bank of Costa Rica announced on Wednesday, October 10th that after the 0.10% decrease in the previous week, the Basic Passive Rate did not change and will be stable at 5.80% until next Wednesday, October 17th.
The exchange rate in the wholesale market Monex reported a clear upward trend during the first four days of the week in Costa Rica, increasing from ¢589.49 to almost ¢600 per dollar.
The Costa Rican currency depreciation against the U.S. dollar has been increasing in recent weeks, mainly due to the uncertainty over the fiscal situation and the greater perception of risk by investors and consumers, even though the tax reform law has already been approved in the first debate. The new law's future depends on the Constitutional Chamber, which must give its approval before being discussed and eventually approved in the second debate. See: "Tax reform: Partial Solution." [GRAFICA caption="Click to interact with the graphic"]
The impact of the strike, the uncertainty of the fiscal situation and the increased risk perception by investors and consumers, explain much of the depreciation that the Colon is suffering against the dollar in Costa Rica.
Figures from the Central Bank of Costa Rica (BCCR) suggest that between September 27th and October 5th the exchange rate in the wholesale market Monex registered a significant upward trend, which is reflected in the increase from ¢570.75 to ¢591.25 per dollar, equivalent to a depreciation of 3.59%.
The Effective Rate in Dollars increased from 2.32% to 2.40%, while the Basic Passive Rate decreased from 5.9% to 5.8%.
The Central Bank of Costa Rica published on Wednesday afternoon, October 3rd that after the increase of 0.15% of the previous week, the Basic Passive Rate reported a reduction of 0.10% and will remain at 5.80% until next Wednesday, October 10th.
In Costa Rica, between January 1st and September 21st, 340 suspicious financial transactions were reported, of which 83% were committed by banks.
According to the Costa Rican Institute on Drugs, among the most reported activities are: construction sector, services, rentals, property agents, activities related to software and information technology, automotive sector, legal activities, fishing, air transport, among others.
Explained in part by doubts about the economic future in the short term, in Costa Rica credit granted to companies and individuals went from growing at an annual rate of 8% in January to 4% in June of this year.
According to figures from the Central Bank of Costa Rica, in the first six months of the year credit to the private sector has reported a clear downward trend, since in January the amount registered amounted to $34.072 billion and the increase compared to the same month in 2017 was 7.9%.
The Passive Base Rate went up from 5.75% to 5.9%, while the Effective Rate in Dollars rose from 2.23% to 2.32%.
The Central Bank of Costa Rica published on Wednesday, news that after recording a decline last week, the Passive Base Rate rose by 0.15%, and the level at which it will remain until next Wednesday, October 4 is 5.90 %.[GRAFICA caption = "Click to interact with graphs"]
Even though the Central Bank of Costa Rica intervened yesterday selling $31 million in the foreign exchange market, at the end of the day the exchange rate in the Monex market stood at ¢585.8 per dollar.
According to figures from the Central Bank of Costa Rica, between September 25 and 26 the weighted average exchange rate in Monex rose from ¢579.54 to ¢581.76.This depreciation came a day after the government announced that with a "loan" of $866 million from the Central Bank, it would pay part of its current obligations for the last quarter of the year.See: "Clutching at Straws" in Costa Rica".
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O4Bi is a very robust system that allows to control and...
O4Bi is a system that allows to control and manage what a company needs: the complete process of development of works, accounts receivable, treasury, banks, sales and accounting.
O4Bi is a very robust system that allows to control and...
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