Central Bank decreases rate in September

Central Bank extends easing cycle: At its meeting on 18 September, the Central Bank of Costa Rica (BCCR) decided to reduce its policy interest rate by 25 basis points to 3.50%, marking the second consecutive cut.

Muted price pressures drive the cut: Key factors behind the Central Bank's decision included inflation trending downward and hovering below the 2.0–4.0% target range, partly due to severe external and climatic shocks. Inflation expectations point to a slight pickup, with prices seen rising toward the lower limit of the target range, while economic activity remains high and near potential.

BCCR to stay on hold: The Central Bank did not provide specific forward guidance on future interest rate decisions. All of our panelists expect the BCCR to stand pat through the remainder of 2025. The next meeting is set for 23 October.

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