Although Costa Ricans have opted for greater foreign-currency loans, there are several factors behind an increase in dollar rates that could affect their credit share.
1. The public’s preference for dollars: By 2016, the dollar credit to the private sector increased again, whereas the trend for colones has been downward.
2. Banks’ regulatory limits: Pedro Aguilar, Aldesa’s head of Economic Analysis, said that for 2016, there was an increase in the regulatory limit for the Short-term Liquidity Coverage Ratio (ICL), which regulates liquidity for colones and dollars separately.
3. Expensive funding: The most important source of dollar funding for the financial system have been international financial markets in recent periods.
4. Higher rates for savings and investments: The greatest need for dollar liquidity has prompted brokers to raise their deposit rates.
5. International rates’ adjustments: Gradual adjustments on international exchange rates are likely to continue.