With the reduction made by the Central Bank to the Monetary Policy Rate (MPR), this indicator reached levels not seen since November 2017. It went from 4.75% to 4.50% and became the third reduction to this indicator so far this year. In fact, in January, the indicator was at 5.25%.
The measure responds to low economic activity, unemployment and slow growth of credit, which, according to the Central Bank, are taking inflation down, which is counterproductive for the desired economic recovery.
On the other hand, this initiative also seeks to encourage a greater appetite for credit.
This is an additional measure of monetary stimulus that seeks to promote greater growth of the economy and use of its resources, including human resources. It is a measure that is added to others announced in recent days, including the reduction of the minimum legal reserve on deposits in colones and flexibility of certain prudential supervision rules that could lead to greater demand for placement in the private sector,”
said Alberto Franco, economist of Ecoanalysis
The movement should not take the market by surprise, because in a context of low economic growth, unemployment and inflation, the issuing entity uses its monetary policy instruments to stimulate the economy.
Of course, these movements will not be transferred immediately to other financial institutions.
According to the Central Bank, the MPR seeks to influence monetary and financial variables to achieve specific objectives, which in the case of Costa Rica, are limited to low and stable inflation.