Central Bank could raise dollar interest rate

June 19^th, 2013 (InsideCostaRica.com) Central Bank President Rodrigo Bolaños said that restrictions on credit growth in dollars at the country’s financial institutions could potentially be lifted, but that the Central Bank would take other measures against risk associated with an over-abundance of dollars.

Bolaños said that the current scheme is geared towards limiting the amount of dollars in the marketplace, but the price (interest rate) of dollars could be another option, if “rates reflect the risks.”

The Central Bank president said that Costa Ricans should be aware that excessive credit growth in dollars threatens the national economy, since the dollar is a foreign currency and generates a dependence on foreign markets to finance the expansion.

Bolaños said that dollars and colones are not on an equal playing field, because dollar interest rates do not reflect the risk they represent.

Bolaños said that the measure could be announced in July.

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