Costa Rica Monetary Policy March 2022

Costa Rica

Costa Rica: Central Bank raises policy rate for third consecutive time at March meeting

March 14, 2022

At its 14 March meeting, the Central Bank of Costa Rica (BCCR) raised the monetary policy rate by 75 basis points to 2.50%, marking the third consecutive hike.

The decision came amid the highest inflation figure since December 2014, which reached 4.9% in February and thus went over the upper bound of the Bank’s 2.0–4.0% target band. The Bank also noted that price pressures are expected to pick up further this year as a result of higher commodity prices due to the ongoing war in Ukraine. Furthermore, stronger-than-expected economic growth in 2021, and continued momentum at the outset of 2022, provided the Bank with room for the hike.

In its communiqué, the BCCR did not provide any forward-looking statement, but hinted that it was approaching a neutral policy stance. The majority our panelists see rates rising further to some degree through 2022.



Commenting on the outlook, Gabriel Lozano, Chief Economist at JPMorgan, commented:



“Mounting demand-side pressures warrant a more decided action from BCCR in order to anchor inflation expectations, which still remain relatively anchored. If the European conflict proves to be shorter than expected, we will have to revisit our forecasts once more, but for the time being, our central scenario suggests tighter monetary policy right at the time of the political transition, with the run-off election taking place on 3 April.”



The next meeting is scheduled for 27 April.

FocusEconomics Consensus Forecast panelists project that the monetary policy rate will end 2022 at 3.56% and 2023 at 4.00%.


Author:, Junior Economist

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Costa Rica Monetary Policy Chart


Costa Rica Monetary Policy March 2022 0

Note: Policy Interest Rate in %, eop.
Source: Banco Central de Costa Rica (BCCR).


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