Costa Rica’s Basic Passive Rate decreases 0.25 percent
Costa Rica’s Basic Passive Rate (BPR) decreased from 10.25 to 10 percent on Thursday after remaining above 10 percent for more than three months.
On Oct. 25, President Laura Chinchilla expressed “concern about the high interest rates paid in the country and the effects on Costa Rican finances.” The government initiated a monitoring process, which prompted public banks to lower average rates.
BPR is used by banks to calculate loan rates, mainly housing loans. This means that the increase or decrease in the BPR affects a loan’s monthly payments.
Vice President Luis Liberman said he was satisfied with the reduction, and “the implications are very important for Costa Ricans, because each quarter point less in BPR means an annual reduction of some ₡15 billion [$30 million] for Tico debtors.”
“A family with a housing debt of ₡15 million [$300,000] would have a reduction in their monthly interest of some ₡4,000 [$8],” Liberman said.
The reduction, however, will not be noticeable for debtors until next year, while banks adjust their rates, and it affects those with savings in dollars, as interest rates will also decrease.
The BPR is an average of the interest rates of private and public banks and non-banking financial companies. It is calculated with all deposits in local currency received within six months and the average rate of a joint auction between the Central Bank and the Finance Ministry. It takes into account available balances of up to six months of each of the banks and companies included in the calculation.
In November 2011, the BPR was 8.25 percent.
You may be interested
Costa Rica at a glance: top news from the past weekThe Tico Times - May 21, 2018
Newly inaugurated Costa Rican President Carlos Alvarado is closing in on two weeks on the job. Here are some of…
PHOTOS: International Museum Day in Costa RicaMitzi Stark - May 21, 2018
May 18 is International Museum Day, and Costa Rica celebrated with 31 mini-museums all in one at the Casa del…
Costa Rica, Panama refuse to acknowledge Venezuelan election resultsAFP - May 21, 2018
Costa Rica and Panama were two of 14 countries in the Americas to announce they would not acknowledge the results…