Banco Central de Costa Rica

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Monetary Policy

 

Monetary policy is an area within economic policy that is exclusively entrusted to Central Banks, whose aim is to impact on monetary and financial variables to attain specific objectives. In the case of Costa Rica, these objectives involve solely keeping low and steady inflation rates.

 

This helps preserve Costa Ricans’ purchasing power through salaries and incomes, and facilitates decision-making, thereby favoring savings and investment, and ultimately, economic growth.

 

En 2005 BCCR’s Board of Directors decided to migrate, in a gradual and orderly fashion, toward a monetary policy strategy focused on inflation targeting-a process which has not concluded yet.

 

As its name explicitly indicates, the main objective of an inflation goal regimen is inflation, and therefore any inflation target announced -within a range or a specific value- constitutes the nominal anchor of the monetary policy. The main policy instrument are short term interest rates, and the policy is implemented through discretional interventions by the Central Bank in the money market.

 

The public is informed of progress made with this strategy through periodic reports posted on its website (Macroeconomic Program and Inflation Reports, amongst others.)

 

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