Benchmark Rate in Costa Rica
Costa Rica - Benchmark Rate
Central Bank maintains monetary policy at January meeting
At its meeting on 27 January, the Central Bank of Costa Rica opted to leave the monetary policy rate at its record low of 0.75%, having cut it from 1.25% on 17 June last year. With this decision the Bank gave continuity to its accommodative and countercyclical monetary policy, in a bid to support the economy.
The Bank stated that despite the gradual recovery in economic activity through the second half of 2020, uncertainty remains highly elevated as a strong rebound will depend on the country’s ability to contain the spread of Covid-19 and the speed of the vaccine rollout. Moreover, the Bank noted that the economy is underperforming: The output gap remains large and the unemployment rate is still close to record levels. Furthermore, the Bank sees inflation remaining below the lower bound of the 2.0–4.0% target band during 2021 and 2022.
In its communiqué, the Bank reaffirmed its belief that the current loose monetary policy and the other adopted measures have translated into lower real interest rates. As such, the Bank will continue its wait-and-see approach until the measures spill over into the real economy and have a positive effect on activity and the labor market. Consequently, most of our panelists expect the Bank to keep the rate unchanged in 2021, although some expect it to start hiking rates.
The next monetary policy meeting is scheduled for 17 March.
FocusEconomics Consensus Forecast panelists project that the monetary policy rate will end 2021 at 1.45% and 2022 at 2.06%.
Costa Rica - Benchmark Rate Data
|Benchmark Interest Rate (%)||5.95||4.45||5.95||6.00||5.75|
5 years of economic forecasts for more than 30 economic indicators.
Costa Rica Benchmark Rate Chart
Source: Costa Rica Central Bank and FocusEconomics calculations.
Costa Rica Facts
|Exchange Rate||571.0||-0.57 %||Jan 01|
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February 15, 2021
Economic activity slid 4.7% year-on-year in December (November: -5.3%).
February 5, 2021
Consumer prices increased over the previous month in January, clocking in a 0.18% rise, easing from December’s 0.53% growth.
January 27, 2021
At its meeting on 27 January, the Central Bank of Costa Rica opted to leave the monetary policy rate at its record low of 0.75%, having cut it from 1.25% on 17 June last year.
January 12, 2021
Consumer prices increased over the previous month in December, clocking in a 0.53% rise, notably up from November’s flat reading and marking a 17-month high.
January 12, 2021
Economic activity continued to shrink in November, although at 6.5% year-on-year it is the mildest contraction since March, following October’s 6.6% drop.