No menu items!

COSTA RICA'S LEADING ENGLISH LANGUAGE NEWSPAPER

HomeArchiveStandard & Poor’s Predicts Stable Financial Markets

Standard & Poor’s Predicts Stable Financial Markets

In light of Laura Chinchilla’s election on Sunday, the New York – based Standard & Poor’s Rating Services announced its prediction that the Costa Rican monetary market will remain stable over the next four years.

“The stable outlook reflects our expectation that the next administration of President-elect Laura Chinchilla will maintain stability in key economic policies,” said Standard & Poor’s (S&P) credit analyst Joydeep Mukherji. “The recent increase in the general government fiscal deficit likely will be reversed this year as tax revenues rises along with a recovery in GDP growth.

As a result, the government’s debt burden likely will remain stable in coming years.”

According to S&P, the favorable prediction was based on several factors, particularly the continuation of presidential rule by the National Liberation Party (PLN).

The index rating considered the lack of changes in the “political system and rule of law” a principal factor contributing to a stable financial system. S&P also referenced the high level of social development and moderate government debt as indicators of stability in coming years.

Costa Rica was given the “BB/B” rating for foreign currency and a “BB+/B” local currency credit rating. S&P also rated transfer and convertibility assessment “BBB-” and gave a “BB+” rating on foreign currency senior unsecured debt.

On the negative side of the analysis, S&P stated that the lack of flexibility in the exchange rate limits Costa Rican monetary policy. The report considered this to be a “constraining rating factor” and suggested that a more “supple monetary policy” would improve the country’s financial standing.

Since 2000, the exchange rate of the colon to the dollar has grown an average of ¢27 per year, but adjustments in the exchange rate in 2009 did not follow this pattern.

On Jan. 1, 2009, the colón had a buy value of ¢550 against the dollar, with a sell value ¢10 higher. On Jan. 1 of this year, the buy value stood at ¢558 with a sell value of ¢571. In the first six weeks of the year, the exchange rate has fallen, with a ¢548 buy value and ¢558 sell value as of Tuesday. One year earlier, on Feb.9, 2009, the exchange rate was ¢8 higher.

Since the exchange rate peaked in August, 2009, nearing a sell value of ¢600, Central Bank of Costa Rica (BCCR) officials say they have managed and lowered the exchange rate by releasing more colones into to the economy.

–Adam Williams

Trending Now

Melinda Hildebrand Confirmed as US Ambassador to Costa Rica

The United States Senate has approved Melinda "Mindy" Hildebrand as the new ambassador to our country, marking a fresh chapter in bilateral ties between...

Costa Rica Adds 17th Accessible Beach at Playa Blanca

Costa Rica added another spot to its list of inclusive coastal destinations this week. Playa Blanca in Punta Morales de Chomes now stands as...

Costa Rica Joins US-Led Bid for 2031 Women’s Soccer World Cup

The United States, Mexico, Costa Rica, and Jamaica have teamed up to bid for hosting the 2031 FIFA Women's World Cup. This marks the...

Scientists Identify New Salamander in Costa Rica’s Highest Peak Ecosystem

Scientists have identified a new salamander species in the remote páramo of Chirripó National Park, highlighting our country's rich biodiversity and the pressing challenges...

Belize Signs Safe Third Country Deal with US for Asylum Seekers

Belize and the United States have sealed a deal that positions Belize as a temporary host for migrants pursuing asylum in the U.S., according...

Second Phase of FIFA 2026 World Cup Tickets Launches

Fans across the globe now have another shot at securing seats for the FIFA World Cup 2026, as the organization opens the second phase...
Avatar
spot_img
Costa Rica Coffee Maker Chorreador
Costa Rica Coffee Maker Chorreador
Costa Rica Travel Insurance
Costa Rica Rocking Chait
Costa Rica Travel

Latest News from Costa Rica