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Costa Rica: Central Bank leaves rates unchanged in April
BCCR stays on hold: At its meeting on 10 April, the Central Bank of Costa Rica (BCCR) unanimously decided to keep its policy interest rate at 4.00%, where it has stood since October 2024.
Global trade uncertainty calls for caution: Heightened uncertainty regarding trade policy and its economic implications prompted the BCCR to hold rates rather than resume monetary policy easing. Most other developments supported rate cuts: The Bank noted that inflation remained below the 2.0–4.0% target range in recent months. Additionally, it now expects inflation to return to target in Q1 2026, rather than in Q4 2025 as projected at the March meeting, due to a change in forecasts for oil and grain prices. That said, it highlighted that risks to the inflation outlook are skewed to the downside and stem from lower-than-expected GDP growth in key trading partners and commodity prices.
Bank to deliver a small cut: The Central Bank did not provide explicit forward guidance on the future direction of interest rates. Our Consensus is for the BCCR to deliver a 25 basis points cut by end-2025. That said, a significant minority expects the Bank to stand pat throughout the year, while one panelist sees scope for rate hikes. This underscores a highly uncertain economic environment amid sustained geopolitical tensions. Lower-than-expected cuts by the U.S. Fed are an upside risk, while a stronger-than-anticipated colón is a downside risk.
