• Costa Rica Coffee Guide

Colon tanks, Costa Rica raises interest rates to slow inflation

November 1, 2018

For the first time in history, the Costa Rican Colon surpassed 600 colones per dollar. On Wednesday, some banks were reporting an exchange rate of ₡616 for $1.

This week’s dip was caused by uncertainty surrounding the proposed tax reform bill designed to contain Costa Rica’s growing public deficit.

The proposal passed the first debate in the Legislative Assembly and is now being debated by the Constitutional Chamber of the Supreme Court (Sala IV). The Minister of the Presidency, Rodolfo Piza, said the currency’s devaluation was a “wakeup call” that showed the need to pass tax reform.

“Several months ago, the Finance Minister (Rocío Aguilar) said that if the [tax reform bill] wasn’t passed in time, there would be strong effects on the economy,” Piza said.

The Costa Rican Colon’s value dropped 9 percent in 2018 according to the Central Bank of Costa Rica (BCCR).

On Thursday, the BCCR announced steps it was taking to slow inflation. Rodrigo Cubero, president of the BCCR, said that Costa Rica would raise interest rates. The policy rate rose 25 base points to 5.25 percent per year while the gross interest rate rose 19 base points to 3.23 percent per year.

“The Central Bank’s inflation models suggest that inflation in 2019 could surpass the upper limits of our target range,” Cubero said. The BCCR established an inflation goal of 3 percent, with a margin of plus or minus 1 percentage point.

You may be interested

DIMEX required for vaccination, Costa Rica says
Costa Rica
16395 views
Costa Rica
16395 views

DIMEX required for vaccination, Costa Rica says

Alejandro Zúñiga - March 3, 2021

Costa Rica began administering coronavirus vaccines in December 2020, and the country hopes to inoculate its entire adult population. We've…

Campaign to help families, businesses in Guanacaste
Business
1248 views
Business
1248 views

Campaign to help families, businesses in Guanacaste

The Tico Times - March 3, 2021

Costa Rican authorities this week relaunched a campaign to support businesses and provide meals to tourism employees who lost their…

24 travelers have been caught with falsified Covid tests: report
Costa Rica
1846 views
Costa Rica
1846 views

24 travelers have been caught with falsified Covid tests: report

The Tico Times - March 3, 2021

Twenty-four travelers have been penalized after presenting falsified coronavirus test results when trying to leave Costa Rica through Juan Santamaría International…