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Costa Rica's central bank lowers key rate by another 50 basis points

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Costa Rica's central bank lowers key rate by another 50 basis points

Costa Rica's central bank once again lowered borrowing costs at its last monetary policy meeting of 2019, continuing an easing cycle that has seen the benchmark rate fall multiple times this year.

Banco Central de Costa Rica cut its policy rate by 50 basis points to 2.75%, following a similar reduction in October.

In announcing the decision, the bank noted that annual inflation in the Central American country slowed for the third consecutive month in November, falling to 1.9% from 2.1% in the previous month. Although economic activity accelerated for the fifth straight month in October, the average growth rate for the last 12 months was at 1.7%, lower than the estimated potential growth of 3.5%.

A number of factors, including a forecast for inflation expectations to remain anchored to the bank's target, provide room to "continue with countercyclical monetary policy measures," the central bank said.

The regulator also lowered the gross interest rate on one-day deposits by 41 basis points to 1.44%.