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Costa Rica Monetary Policy January 2025

Costa Rica: Central Bank leaves rates unchanged in January

Central Bank holds again: At its meeting on 23 January, the Central Bank of Costa Rica (BCCR) unanimously decided to maintain the policy rate at 4.00%. The decision marked the second consecutive hold.

Central Bank holds interest rates at neutral level: The Bank noted that inflation has increased in recent months and reiterated that it expects price pressures to rise further, returning to the 2.0–4.0% target range around Q3. It added that rates are expected to be at their neutral level, based on inflation expectations, as a result of past rate cuts and changes in the inflation outlook. Moreover, the BCCR said that economic activity remained strong by historical standards in Q4. Against this backdrop, the Bank deemed it appropriate to hold interest rates.

BCCR to proceed with caution: The Central Bank did not provide specific forward guidance on the future direction of interest rates but reiterated its commitment to maintaining low and stable inflation. Given the statement that interest rates have reached neutrality, the Bank is unlikely to deliver sizeable cuts or hikes this year. Our Consensus is for a 25 basis points cut by end-2025. The next meeting is scheduled for 13 March.

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