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Banco Scotiabank to cancel credit cards of 20,000 clients to meet interest rate cap

(QCOSTATICA) Scotiabank Costa Rica announced this week it will cancel, over the course of the next six months, credit cards to some 20,000 clients to comply with the new interest rate caps, imposed in the usuary law recently enacted. Likewise, the bank explained that it...

Central Bank defines maximum interest rate for credit cards

(QCOSTARICA) The Banco Central de Costa Rica (Central Bank) published early Friday morning the maximum interest rates for credit operations in colones, dollars, and other currencies, in accordance with the new Ley de Usura - usury law - now in effect. Through a press release,...

President signs law to regulate usury

(QCOSTARICA) On Tuesday, President Carlos Alvarado signed into law the usury law that sets a maximum interest rate of 39% loans in colones and 31.5% in dollars for loans of ¢675,000 colones and higher. For loans of less than ¢675,000, classified as microcredit, the rate...

¢900 billion fund to revive the economy

(QCOSTARICA) The Superintendencia de Entidades Financieras (SUGEF) and Consejo Nacional de Supervisión del Sistema Financiero (Conassif) will eliminate requirements and relax conditions to boost the loan fund of ¢900 billion colones that the Government announced last week (May 8), as the main bet for...

20 changes that the Government applied to help companies and people against the coronavirus

With a clear focus on defending employment and freeing up money so that companies and individuals have a "cash flow" in the coming days, dulled by the uncertainty caused by the coronavirus in the economy, the Government has so far added 20 actions aimed...

Government readies economic support measures for sectors hardest hit by coronavirus in Costa Rica

The Government of Carlos Alvarado is expected to present today, Saturday, March 14, a series of economic measures to counteract the negative effects that the covid-19 coronavirus is having on Costa Rican productive sectors. President Carlos Alvarado made the announcement on his Twitter account. Mañana anunciaremos...

What will be the impact of the coronavirus on the Costa Rica economy?

The impact of the coronavirus on Costa Rica's economy depends on the extent of contagion and how long it will last, as well as the effectiveness of government measures, such as interest rate cuts. However, the impact would be felt to a greater or lesser...

We Haven’t Hit Bottom Yet

Jobs are in short supply in Costa Rica as a result of low levels of investment while sales of goods and services are dwindling; Risk of investing in Costa Rica increases due to weak public finances, according to Moody's Investors Service. Even a small increase...

Costa Rica Usury Rate Defined

Legislators of the Legislative Committee on Tax Matters negotiated to establish a ceiling of a 55% interest rate on loans of less than ¢675,000 colones, and 39.4% for loan amounts over. Those rates are based on a technical calculation that is currently still part of...

Costa Rica Reduces Rates Again

For the seventh time this year, the Banco Central de Costa Rica (Central Bank) decided to reduce the monetary rates as a measure to stimulate economic activity, this time from 3.25% to 2.75%. With this adjustment, the Tasa de Política Monetaria (TPM) - Monetary Policy...

Credit Does Not Rebound, Even With Lower Rates

Although the Banco Central de Costa Rica (BCCR) - Central Bank -  has been reducing the monetary policy rate to boost the issuance of bank credit, the speed with which the portfolio of loans in colones (national currency) grows continues to decrease. Official data from...

Brakes to Monetary Policy Rate Reduction

After lowering the rate six times between January and October of this year, in its last review the Banco Central de Costa Rica (BCCR) - Central Bank - decided to maintain it at 3.25%, because the inflationary rate registers a significant slowdown. The last reduction...

Costa Rica Rising Interest Rates

The Basic Passive Rate (Tasa Básica Pasiva -  TBP) rose from 5.50% to 5.60%, while the Effective Rate in Dollars (Tasa Efectiva Dólares - TED) also rose, in this case from 2.33% to 2.39%. The Banco Central de Costa Rica (BCCR) -  Central Bank -...

Costa Rica Lowers Interest Rates

The Basic Passive Rate decreased from 5.65% to 5.50%, while the Effective Rate in Dollars also decreased, from 2.52% to 2.33%. The Banco Central de Costa Rica (Central Bank) published on Thursday the rates that will be in effect for the coming week. The Basic Passive...

Costa Rica’s Monetary Policy Rate Falls Again

A “high uncertainty” in the global economy, associated to the tensions between the U.S. and China, together with the slow growth of production in Costa Rica caused the Central Bank of Costa Rica (BCCR) to reduce, for the fifth consecutive time this year, its...

Costa Rica’s Central Bank Slows Down Monetary Policy Rate

Among the arguments of the Banco Central de Costa Rica (BCCR ) - the Central Bank - it is worth highlighting that the international interest rates are adjusted downward. From the BCCR statement: The Board of Directors of the Central Bank of Costa Rica (BCCR), in...

Costa Rica Government Seeks To Revive Credit But Faces A Pessimistic Consumer

The government of Carlos Alvarado and the main financial institutions of the country are betting on facilitating the necessary conditions so that the appetite for consumer credit is reactivated, which has been in a slowdown for some time. The main problem they face is that...

Dollar Exchange Takes A Nose Dive!!!

The dollar exchange dropped almost ¢5 colones overnight, going from ¢578.21 for the sell and ¢589.05 for the buy on Monday, to ¢572.15 and ¢578.29, respectively, this Tuesday. On the Monex market, the dollar traded at ¢575.55 on Monday, ¢3.32 lower than Friday's close, almost...

Basic Rate Keeps Going Up

The basic interest rate (Tasa básica pasiva) increased to 6.55%, a level that had not been recorded for four years, while the effective interest rate (Tasa efectiva dólares - TED) in U.S. dollars also increased, in this case to 3.14%. According to data published by...

Dollar Price Keeps Dropping

A greater supply of dollars, high local interest rates and a decrease in imports of durable goods explain the decreasing trend of the U.S. dollar exchange rate in Costa Rica, which on June 18 reached the lowest level of the year. In 2018, the dollar...

Basic Passive Rate Keeps Rising

The Basic Passive Rate (Tasa Básica Pasiva in Spanish) keeps on rising, this week increased from 6.30% to 6.35%, while the Effective Rate in Dollars (Tasa efectiva dólares) decreased from 2.99% to 2.92%. The Banco Central de Costa Rica (BCCR) - Central Bank - publishes...

Costa Rica’s Economic Activity Remains Low

During January 2019, the Monthly Index of Economic Activity - Indice Mensual de Actividad (IMAE) -  in Costa Rica reported a 1.6% year-on-year increase, which is less than the 3.2% recorded in the same month last year. With the exception of construction, all economic activities...

Local Currency Shortage Pushes Interest Rates Up

In Costa Rica, the government's strong need for financing and the Central Bank's exchange rate interventions have been putting pressure on the local financial market, pushing up passive rates in Colones. The decrease in liquidity in Colones generated by the pressure exerted by the government...

Does the government have the money to pay the Aguinaldo for this 2018?

If you ask me today if I have it, I say no (...). There is never that liquid money in an entity like the Ministry of Finance in the circumstances in which it is. Today, the Treasury is, as we say there in Guanacaste,...

Banks Throttle Back Slightly On The Dollar, As Spiral Upwads Continues

It's been a frantic week, a financial rollercoaster for the dollar exchange. In the week, the foreign currency appreciated by ¢18.39, opening last Friday at ¢601.25 and closing yesterday at ¢619.64 in the wholesale market. At some banks we saw a high of ¢630 colones...

Costa Rica Effective Dollar Rate Goes Up

The effective rate in dollars went up to 2.13% from 2.01% last week, while the passive basic rate in colones dropped to 5.75% after remaining at 5.80% for two consecutive weeks. The Banco Central de Costa Rica (BCCR) - Central Bank of Costa Rica -...

Moody’s Questions Tax Benefit Of Plan To Handle Illiquidity in Costa Rica

  According to Moody's, the plan to reduce expenses announced by President Luis Guillermo Solís will not be enough to solve the illiquidity problem being faced, nor to avoid a rise in local interest rates. The plan to cut costs that are not mandatory in the...

Loans in Colones Get More Expensive

Interest rates on bank loans have increased by between 0.11% and 6.6% in the last year, and those for loans for construction, livestock and commerce, are where the highest increases have been recorded. Data published by the Banco Central de Costa Rica (BCCR) - the...

Banks Fear Increased Requests To Change Loans From Dollars to Colones

Q MONEY - A hike of ¢9.64 colones in the dollar exchange market since last Friday alone has some bank customers scared, and banks anticipating a significant increase in the number of their clients interested in changing their loans from dollars to colones. The dollar...

Loans in Dollars in Costa Rica Get More Expensive

(QCOSTARICA) Arguing an attempt to control credit growth in dollars, the Central Bank will apply a reserve limit of 15% to banks that receive lines of foreign funding in that currency. The banking sector has opposed the measure, asserting that it will result in an...

Costa Rica’s Plastic Money Market

QCOSTARICA - Almost three fourths (72%) of the credit cards circulating in the country have interest rates from between 40% and 50%, while the default interest varies from 24% to 65%. The results are from a stud by the Ministry of Economy, Industry and Trade...

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