Banco de Costa Rica, Banco Popular, National Bank weigh in on rising interest rates and demand for more Colones
Public banks say competitive reasons causing rising interest rates. Between September and October, the base rate moved between 10% and 11%, marking a large interest rate jump, while the inflation rate remains at 4.5%.
For public banks, the increase is due to competitive reasons. The management of the National Bank, said that the National Bank has no liquidity problems and is not pushing up rates.
Management of the Banco de Costa Rica, specified that the rate increase will not only be attributed to public banks but there are several players that influence the increase in interest rates before the need for funding, stating that there is excess demand versus supply
Management of Banco Popular, reaffirmed this.
The justification given by banks after the president, Laura Chinchilla, made a strong call for attention to public financial institutions blaming them for the constant rise in the basic passive rate and interest intermediation.
For the Research Institute of Economics of the University of Costa Rica, the rate hike is due to the uncertainty regarding the evolution of the market for available loan funds.
The increase in recent months is due to the increased demand of Colones, both private and public.
The Central Bank has maintained control over the liquidity in order to meet the inflation target.
The Costa Rica News (TCRN)
San Jose Costa Rica