LatinNews Daily - 02 November 2018

* The president of Costa Rica’s central bank (BCCR), Rodrigo Cubero, has announced that the bank’s board has decided to increase its benchmark interest rate by 0.25 basis points to 5.25%. Speaking at a press conference after the BCCR board meeting, Cubero explained that the bank’s directors had decided on the move in a bid to counteract the inflationary pressures in the country resulting from the appreciation of the US dollar against the Colón. Cubero noted that the exchange rate pressure was being driven by external factors such as the increase in interest rates in the US but also by internal factors such as the uncertainty over the success of the fiscal reform that the Carlos Alvarado government is trying to push through congress, which is designed to reduce Costa Rica’s widening fiscal deficit. The BCCR president also explained that while the national inflation rate is currently running at around 2.2% – within the bank’s target range of 2%-4% – the BCCR board had decided to increase the interest rate on the basis that if no measures were taken to dampen inflationary pressures now, “inflation would be running above the target range in 2019”.

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