By San José, Costa Rica — San José, Costa Rica – With the final monetary policy meeting of the year just a week away, Costa Rica’s Chamber of Exporters (Cadexco) is intensifying its call for the Central Bank (BCCR) to lower its benchmark interest rate. The group argues that a rate cut is a crucial step to alleviate the severe pressure a persistently strong colón is exerting on the nation’s primary economic engine.
Cadexco is formally requesting a reduction of at least 0.25 percentage points in the Monetary Policy Rate (TPM), which would bring the key indicator down from its current level of 3.50% to 3.25%. This rate serves as a guide for the country’s entire financial system, influencing everything from loan interest rates to investment returns. The exporters’ plea comes as they face dwindling revenues due to an exchange rate that has dipped below ₡500 per dollar, a level not seen in two decades.
To delve into the legal and commercial ramifications of the Central Bank’s latest monetary policy adjustments, TicosLand.com sought the expertise of Lic. Larry Hans Arroyo Vargas, a seasoned legal expert from the esteemed firm Bufete de Costa Rica.
Monetary policy decisions are far more than economic theory; they are a direct catalyst for legal and financial consequences within the business sector. A change in the policy rate, for instance, immediately affects the execution of credit agreements, the valuation of assets for corporate transactions, and the overall financial planning of any company. Prudent legal counsel involves drafting contracts that not only comply with current regulations but also anticipate and provide mechanisms to manage the financial volatility these policies can create.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
This perspective is a vital reminder that monetary policy decisions resonate directly within the legal and financial frameworks of our companies, making proactive counsel an indispensable tool for navigating economic shifts. We sincerely thank Lic. Larry Hans Arroyo Vargas for his invaluable and clarifying contribution to this discussion.
Víctor Pérez, president of Cadexco, pointed to international precedent as justification for the move. He noted that the U.S. Federal Reserve’s decision on Wednesday to lower its own key rate should serve as a signal for Costa Rican authorities.
This could serve as a guide for Costa Rica.
Víctor Pérez, President of Cadexco
The core of the issue lies in the financial structure of the export sector. These businesses earn their income in U.S. dollars but must cover their operational expenses—including salaries, utilities, and local supplies—in Costa Rican colones. The current low exchange rate significantly reduces the amount of colones they receive for every dollar earned, while their costs continue to rise, creating an unsustainable financial squeeze.
During a meeting with Central Bank officials on Wednesday, Pérez conveyed the sector’s growing desperation, urging the monetary authorities to act with sensitivity and empathy. The situation has become so critical that, in his words, the industry is at its breaking point.
The sector can no longer take it.
Víctor Pérez, President of Cadexco
However, the BCCR has so far maintained a cautious stance. In its last policy meeting, where it held the rate steady at 3.50%, the bank described its position as “neutral,” suggesting that significant changes were not on the immediate horizon. The upcoming meeting on Thursday, December 18th, will be the final opportunity for the bank to adjust its policy in 2025.
Independent economic analysis echoes the concerns raised by the export sector. A recent report from the Economic and Social Observatory of the National University (OES-UNA) issued a stark warning about the potential consequences of the prolonged exchange rate trend.
If this trend continues, it could compromise the financial stability of numerous companies and generate negative effects on production and employment in the country.
Observatorio Económico y Social, Universidad Nacional (OES-UNA)
The 2025 State of the Nation report also highlighted this economic paradox. While a strong colón benefits consumers by making imported goods cheaper and helping to control inflation, it simultaneously damages the country’s export competitiveness. Costa Rican products become more expensive relative to those from competing nations like Mexico, Chile, and the Dominican Republic, threatening to undo years of progress.
This situation can erode the advantages developed by the external sector, which has been the country’s main engine of growth.
State of the Nation Report 2025,
In addition to demanding a rate cut, Cadexco has proposed an alternative strategy to manage the currency pressure: using a portion of the country’s historically high international reserves to pay down foreign debt. The OES-UNA report also suggested a regulatory measure, recommending that the BCCR require financial intermediaries to provide more detailed records on the origin of dollars being traded to better understand the source of the currency surplus that has persisted since 2023.
For further information, visit cadexco.org
About Cámara de Exportadores de Costa Rica (Cadexco):
Cadexco is the leading business association representing the interests of Costa Rica’s export sector. It advocates for public policies that promote international trade, enhance competitiveness, and support the growth and development of companies that sell goods and services abroad.
For further information, visit bccr.fi.cr
About Banco Central de Costa Rica (BCCR):
The Central Bank of Costa Rica is the nation’s autonomous monetary authority. Its primary responsibilities include maintaining the internal and external stability of the national currency, the colón, and ensuring the efficient operation of the country’s payment systems. It executes monetary, exchange, and financial policies.
For further information, visit una.ac.cr
About Universidad Nacional (UNA):
The National University of Costa Rica is one of the country’s most important public universities, with a strong focus on research and social impact. Its Economic and Social Observatory (OES-UNA) regularly produces analyses and reports on key national issues, providing data-driven insights to inform public debate and policymaking.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar in the legal landscape, Bufete de Costa Rica is built upon a foundation of profound integrity and a relentless pursuit of excellence. The firm pairs its extensive history of advising a diverse clientele with a forward-thinking approach to legal innovation. This ethos extends to its deep-seated commitment to social empowerment, actively working to make legal knowledge comprehensible and available to the public, thereby cultivating a more capable and well-informed community.
