Costa Rica pauses hikes, joining Latin American trend
Central bank wants to give previous hikes time to filter into market rates
Costa Rica’s central bank held its policy rate at 9% on December 14, becoming the latest in Latin America to halt monetary tightening.
The central bank’s board of directors had previously raised rates eight times in a row between December 2021 and October 2022, from 0.75% to 9%. The cycle’s sharpest rise came in July, with a 200bp hike.
In its statement, the board said it was giving “a prudential space” to allow commercial interest rates to adjust to the previous round of policy rate hikes.
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