The Banco Central de Costa Rica (BCCR) – Central Bank – dropped the Basic Passive Rate (BPR) (tasa básica pasiva in Spanish) to 6.55% on Wednesday, after maintaining the rate at 6.65% for weeks.
This is the lowest rate since 2008 when it dropped to 4.25% in April of that year, climbing back up to a high of 12% in July 2009. Since February of this year, the rate is about one half of the rate in 2005.
The BPR is used as a guide by lending institutions for most loans in colones and is calculated using the weighted behaviour of rates by private and public banks and lending institutions.
With the new methodology for calculating this indicator, approved by the Central Bank last December, the rate is rounded to the nearest five basis points rather than 25 basis points closest as before.
The Banco Central or BCCR is not to be confused with the Banco de Costa Rica (BCR). Similar to other Central Banks in the world, the functions of Banco Central de Costa Rica include providing banking services to the Government of Costa Rica and financial institutions, issuing the domestic currency, regulating commercial banks and other financial institutions, providing economic advice to the Government, conducting research and publishing information on monetary and other economic developments. Only notes and coins issued by the Central Bank shall be legal tender in Costa Rica. The BCR on the other hand is one of three state owned commercial banks.
