Central America: Costa Rica´s Central Bank reduced its inflation target range

CENTRAL AMERICA - In Brief 31 Jan 2014 by Francisco de Paula Gutiérrez

The Central Bank of Costa Rica reduced its inflation target range for 2014-2015 to 4.0% ± 1 p.p. The new target, included in the Macroeconomic Program 2014-15 approved on January 29th, is consistent with the observed decline in the inflation rate during last year (3.68% y/y as of December). The Bank also included its outlook for the main macroeconomic variables, as shown in the following table, under the assumption that a fiscal reform is not approved during the forecasting period and the government places an additional $1.0 billion in the Eurobond market, both in 2014 and 2015. The Bank maintained its commitment with parameters of the currency band and will keep them until conditions to migrate to a full fledge inflation target regime are met.

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