The Central Bank this week hiked the Passive Base Rate to 4.55% and the Effective Rate in Dollars to 2.19% that will hold until next Thursday.

Q COSTA RICA – After last week’s decline,  Thursday  morning  (February 16) the Banco Central de Costa Rica (BCCR) –  Central Bank of Costa Rica hiked the Passive Base Rate (Tasa Básica Pasiva or TBP in Spanish) from 4.50% to 4.55% in Colones and the Eeffective Rate in U.S. Dollars (Tasa Efectiva en Dólares or TED in Spanish) from 2.03% to 2.19%.

Both the current TBP and TED that will remain until Thursday February 23.

The Central Bank sets the TBP and TED each week at the close of business on Thursdays and in effect until the following week.

The Passive Base Rate is an average of deposit rates in colones given by financial institutions for maturities of 150-210 days.

To mitigate the increase in the price of the U.S. dollar in Colones, the Central Bank sold in 2016 about US$815 million of its own reserves (14%).

The monetary reserves of the Central Bank are the U.S. Dollars that the entity has to face external difficulties. Part of these reserves comes from Government deposits in foreign currency at the Central Bank; another, the deposits made by the commercial banks for the reserve (part of their deposits), and another is the Central Bank’s own.

Dollar Exchange Rate. In the past month, the dollar exchange rate has gone from a buy of ¢548.01 and sell of ¢560.59 on January 20 to ¢555.98 and ¢568.92, respectively, today (February 18). See BCCR chart.