Costa Rica: Central Bank leaves rates unchanged in June
Central Bank stands pat: At its meeting on 19 June, the Central Bank of Costa Rica (BCCR) decided to maintain the policy interest rate at 4.00%, where it has stood since October 2024.
Global turmoil calls for caution: The Bank decided to stand pat due to heightened trade and geopolitical uncertainty, as the recent escalation of conflict in the Middle East caused a brief spike in oil prices. Nonetheless, the BCCR noted that consumer prices fell year on year in May, and highlighted that it now expects inflation to return to the 2.0–4.0% target range in Q3 2026, rather than in Q2 2026 as was projected at the April meeting.
BCCR to cut rates this year: The Central Bank provided no explicit forward guidance on future interest rate movements. Our Consensus is for a 25 basis point cut by end-2025. However, some panelists expect a 50 basis points reduction, while others see the Bank holding rates throughout the remainder of the year. A stronger-than-expected colón is a downside risk, while additional oil price spikes and smaller-than-anticipated cuts by the U.S. Fed are upside risks.