Prime Rate Drops to 7%
- Details
- Category: Business
- Published on Saturday, May 21 2011 01:19
- Written by Rod Hughes
- Hits: 1049
The Central Bank, which prefers to keep the prime rate for loans between 7% and 8%, has dropped a quarter of a percent to the lowest number, 7% this week.
Earlier this year, the prime rate soared to 7.5% before dropping back to 7.25% and finally to the percentage this week.
Called the tasa basica pasiva in Spanish, the indicator often shows how expensive it can be to take out short-term loans in this country, between 150 to 210 days. It is an indicator of the average return that can be expected on investments in the short-term.
Also, local banks normally index their credit rates in colones in such a way that any adjustments in it may vary the amounts of loans. According to the Central Bank, the reduction was influenced by the drop in basic rates by the nationalized banks from 6.83% to 6.58%.
The Central Bank calculates its prime rate Wednesday of each week.