Central Bank implements changes to monetary policy and payment system
Costa Rica
14 diciembre 2018

The Central Bank of Costa Rica (BCCR) published a provision that modifies the Monetary Policy Regulations and the Payment System Regulations. As a result, the highest banking authority will participate in the Integrated Liquidity Market (MIL) and will be able to grant credits through Deferred Liquidity Operations to entities supervised by the superintendencies of Financial Institutions, Securities, Pensions, and Insurance. Hence, the agency will also have the possibility of contracting the amount of money available in circulation. The draft regulations had already been published in mid-November.

In order to implement these reforms, the Payment System Regulation incorporates the definition of MIL as a service through which the BCCR controls the liquidity of the financial system, and the other participants carry out financial operations. Furthermore, this regulatory framework stipulates that deferred liquidity operations consist of two contracts agreed simultaneously (the first immediate and the second with future validity). These transactions will always be guaranteed by some type of financial asset or security, and the intervening actors will have facilities for the depositing of money.

The current modification will be accompanied by a net settlement system (for which the necessary technology for its operation will be installed), which will be evaluated within three months of its coming into force in order to review the result of the changes. At the same time, the Financial Policy Execution Commission shall keep the Board of Directors of the BCCR informed about the exchanges made under this new provision and the final document will be published in the coming weeks through the Official Gazette.